Apple just revealed that its made heaps of money last quarter. It broke all kinds of revenue records, and Mac, iPhone and iPad contributed strongly to the total.
But there are also some dark clouds in Apple future. Read on to get the good news and bad from the company’s most recent financial earnings results.
Apple Q3 earnings include records galore
Apple’s third-quarter earnings today was such a blitzkrieg of broken records, you kind of have to wade through them. There were all-time marks topped as well as “best June ever” sorts of superlatives.
Among all-time records broken, the Cupertino tech giant’s services revenue notched an all-time high during the quarter, hitting $17.5 billion, up from $16.9 billion in the previous quarter. That covers Apple TV+, Apple Music, Apple News+, iCloud and other services.
Also tops all-time were the company’s installed base of active devices, with iPhones topping 1 billion and all devices reaching 1.65 billion.
June quarter revenue hit a record $81.4 billion, up 36% over last year’s Q3. Total retail sales hit a new record for the quarter, despite stores being closed for part of it. Mac and iPad sales hit quarterly records (Mac $8.2 billion, up 16% year over year; iPad $7.4 billion, up 12%). Wearables, Home and Accessories also triumphed, up 36% to $8.8 billion.
“Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices,” said Luca Maestri, Apple’s CFO. “We generated $21 billion of operating cash flow, returned nearly $29 billion to our shareholders during the quarter, and continued to make significant investments across our business to support our long-term growth plans.”
That pretty much sums it up. — David Snow
The Mac is back!
The Macintosh launched in 1984 and was Apple’s main product until 2006, when it was overtaken (in terms of revenues) by the iPod. Since then, it’s been overshadowed by the iPhone, which brings in multiple times more revenue.
Many old time Apple fans worried the Mac would be neglected and forgotten, but those fears appear unfounded.
Apple just saw one of the best quarters ever for Mac sales.
Despite supply constraints, sales of the Mac set a June quarter record of $8.2 billion, up 16% from the year before. And get this — the last four quarters were the best ever in the Mac’s history.
“It is remarkable that the last four quarters for Mac have been its best four quarters ever,” said Apple CFO Luca Maestri during the earnings call.
The last two quarters were juiced by Apple Silicon, Apple’s homegrown chips that are running rings around Intel. The redesigned iMac didn’t hurt either.
Steve Jobs would be proud. —Leander Kahney
iPhone 13 might not launch in September
The pandemic pushed the iPhone 12 debut to near the end of 2020, and analysts on today’s call with Apple execs tried to find out if the follow-up will return to a traditional September launch. The answer is… probably not.
Luca Maestri, Apple’s CFO, said, “We expect very strong double digit year-over-year revenue growth during the September quarter.” But he followed up with, “We expect revenue growth to be lower than our June quarter year-over-year growth of 36%.”
Apple’s September 2020 quarter was not very strong because it didn’t include the launch of the iPhone 12. That happened in the December 2021 quarter instead, with a resulting huge increase in revenue.
So if Apple isn’t predicting a particularly strong September 2021 quarter, it’s not likely there’s going to be an iPhone 13 coming in it. —Ed Hardy
Upcoming supply constraints
If you’re salivating about a shiny new iPhone 13 in September or later this year, Apple’s got some sobering news for you: supply might be constrained by a shortage of components.
“The supply constraints that we’ve seen in the June quarter will be higher in the September quarter,” warned Apple’s CFO, Luca Maestri, during the earnings call.
This past year, all kinds of products have been affected as supplies of components run short, from Nintendo’s Switch to bicycles for commuters. Even though things are beginning to open up, many manufacturers are still running behind.
Shortages will impact the iPhone and iPad in particular, Maestri said, but he didn’t elaborate much beyond that, and didn’t specify what, exactly, is in short supply. Tim Cook said Apple is facing the same shortages as other companies; they are not unique to Apple. “I would classify it as industry shortage,” said Cook.
Asked if supply constraints will continue into the holidays, Cook continued to be noncommittal. “We’re going to take it one quarter at a time,” he said. “We will do everything we can to mitigate whatever set of circumstances we’re dealt.” —Leander Kahney
iPhone dominance continues with 1 billion active worldwide
During the Q3 earnings call, Apple reported iPhones sales surged 49.78% on an annual basis, to $39.57 billion for the quarter compared to analysts’ estimates of just over $34 billion. No small part of that was the popularity of the iPhone 12 series, with fast 5G speeds, the A14 bionic chip and killer cameras.
It’s even more impressive when you hear Tim Cook mention 1 billion active iPhones now in use worldwide, of a total of 1.65 billion active Apple devices.
More impressive still? In the U.S., Apple offers the top-three selling smartphones. In the U.K., iPhones fill four out of the top five slots. In Australia and urban China it’s the top two and in Japan it’s the top three. — David Snow
Devs keep making tons of money
The App Store continues to make heaps of money for developers. During the call with analysts today, Apple CEO TIm Cook said, “In June, a new study by The Analysis Group found that it was another record year for App Store developers, whose combined billings and sales increased by 24% to $643 billion in 2020.”
Not surprisingly, Cook didn’t being up any of the controversy surrounding the App Store. At the beginning of 2021, the iPhone maker cut App Store fees to just 15% for its software developers who make less than $1 million a year. Still, some large devs still hold strong objections to the App Store. No matter how much money it’s making. —Ed Hardy