We all saw them coming. Despite the global pandemic and the unstable political and economic situation, Apple remains a source of income. Traditionally, the last three calendar months have been the best for Apple, and Apple has been on the rise in recent quarters.
If you were to bet that the company’s first fiscal quarter in 2021 (which coincided with the Christmas 2020 campaign) would set an all-time high, well, you would have won, but only a fool would have taken the bet.
All product categories and regions increased. It was a veritable deluge of ascending arrows.
And even so, amid the embarrassment of Apple CEO Tim Cook that Apple continues to generate massive sales and profits while the world is in the midst of so much turmoil, there was (as almost always !) Interesting things to do too. help us understand Apple’s business.
Here are a few.
IPhone Pro is a hit
Apple executives praised the iPhone 12 Pro and iPhone 12 Pro Max, saying they had a “very high level of interest” among consumers, which led to problems supply in these models and has helped increase the iPhone’s average selling price.
(How much? We don’t know, as Apple no longer offers the exact number of units sold, but the CFO said units sold and the median selling price increased in the quarter.)
Recently, iPhone 12 mini fans (I’m one of them!) Were shocked by a report that Apple was lowering its sales expectations for the smaller model.
At the time, the iPhone 12 was thought to perform as well as the Pro and Pro Max models, but Apple certainly didn’t include the iPhone 12 in its praise on Wednesday.
It’s interesting, but let’s be clear: the first to run out and buy the new iPhone are probably still the most motivated iPhone buyers, and those buyers are likely to be spending a lot of money on the older models. premium.
It’s entirely possible that the 12 and 12 mini will be a bigger part of the iPhone category as the year progresses. “Normal” people buy iPhones in the spring and summer, you know?
The revenge of “difficult comparisons”
Apple last quarter warned that iPhone sales appeared to be lower than they actually were, as the 2020 iPhone models went on sale much later than the 2019 models.
As a result, Apple’s quarterly results for 2019 included first iPhone sales, and 2020 results did not. These are called “hard comparisons” in the expectation and financial management game.
But these difficult comparisons often turn out to be easy. The results presented on Wednesday manage to include the initial iPhone sales that had already occurred in 2019, giving a boost to the growth of iPhone sales.
However, don’t worry: more difficult comparisons are yet to come. Maestri warned that while the company hopes to revert to its regular sales patterns in 2021, some areas will be affected. These are Apple’s two main growth engines in recent years: services and clothing.
Services benefited greatly from the lockdown at the start of the pandemic last year, but it will not initially be this year. In addition, the line of clothing It benefited from the growth in demand for AirPods a year ago, but it looks like it will be a more “normal” year for Apple.
This means that in April we will surely be there to explain why the sales of services and clothing will be weak. It’s about comparisons.
Apple has recovered in China
Apple’s business in China has been poor for the past two years, but the latest quarter saw revenue growth of 57% compared to the same quarter a year earlier. This is China’s strongest quarter-annual growth in five years.
Apple executives say reopening the board of directors in China, including Apple’s physical stores, has helped a lot, although Chinese markets have retreated, with viral emergencies leading to some closures.
When Apple is doing well in China, the most common reaction seems to be to assume it was the iPhone. And, yes, the iPhone has performed very well in China. Cook said those who have moved to Apple and those who have upgraded to a newer model have increased iPhone sales, helped in part by the implementation of the 5G network, which has increased demand for 5G iPhone.
(Cook didn’t mention the fact that the iPhone 12 was visually different from its predecessors, but in the past, whenever Apple changed the look of the iPhone, iPhone sales in China have been doing well. .)
But it wasn’t just the iPhone! “We couldn’t have improved the situation [en China] just with the iPhone, ”Cook said, noting iPad sales“ above the company average ”in other markets, as well as above-average performance in the Mac and Wearable categories.
“If you look, we did well in all of the categories there,” Cook said.
Plenty of room for growth
Apple has grown a lot, it’s so profitable, that it would be very easy to see the results of the company and assume that it no longer has room for growth. But that would not be correct, as Cook and Maestri have repeatedly pointed out.
“I think we are still at an early stage of the [wearables]Cook said. “If you look at the proportion of other products … you will see that these numbers leave some room for expansion in the market. And this is particularly the case in some emerging markets, where we are happy as we did, but there is a lot of room ”.
Cook gave the example of India. In the last quarter, Apple doubled its activity in India compared to the quarter of the previous year. “But our level of activity there is still quite low because of the opportunities it offers,” he said.
“And you can take that and go around the world and find other markets that are like that too.” He didn’t say which markets he was referring to, but admitted that there are some in other areas where Apple’s market value is still “below what we would like.”
Cook also mentioned the growth of entrepreneurial markets, which has been a “years effort” that has “gained them a bit of strength”.
There is a market where Apple’s market value remains low and there is a lot of room for growth thanks to the switch to Apple Silicon. “The M1 chip gives us a growth trajectory that we haven’t had in the past,” Cook said. “Of course, our Mac’s value is pretty low for the entire personal computer market. So there are a lot of possibilities ”.
Developing a business that is already as big as Apple’s? This is what we would call a “difficult comparison”. But Apple shows little sign of straying from the challenge of breaking its own records.
Original article published in igamesnews US.