Apple had a record-setting quarter with the highest revenues and earnings ever during the Jan-Mar period. All product segments saw record revenue highs. The Mac had an all-time record revenue quarter. All product segments hit record installed bases.
Keys takeaways from the quarter:
- iPhone revenues were up a whopping 66%. Our Global Model Sales Tracker shows record high market share in the US and China. The iPhone 12 family is a tremendous success and it maintained momentum through the quarter. Only in March did supply meet demand.
- Our numbers show record high iPhone ASPs. This is on the strength of the iPhone 12 family and in particular the iPhone Pro Max—a top seller in the US market. Globally, the higher priced Pro Max and Pro models accounted for over half of all iPhone 12 series devices sold.
*Preliminary numbers for Q1.
- All segment growth. iPad and Mac revenues increased 79% and 70% year-over-year. Of course, the pandemic caused work-from-home and school-from-home tailwinds. The school-from-home requirements will eventually return to in-school learning. However, the education installed base has dramatically increased. On the work-from-home side, there will be a high percentage of companies offering a continuation or part-time work-from-home scenario. This will not give iPad and Mac the bump it saw during the pandemic, but it will be higher than pre-COVID. In addition, the in-house M1 engine is impressive and helping with both upgrades and pulling in new consumers. Two-thirds of iPads purchasers were new to iPad.
- Wearables saw double digit growth. Apple Watch Series 6 and Apple Watch SE had large quarters. 75% of sales were first-time buyers and new health apps and health services helped with stickiness of the hardware.
- Services grew 27% year-over-year. Apple added 40mn paying subscribers sequentially and 140mn annually. There are now 660mn paying subscribers. Counterpoint Research believes Apple TV+ saw high growth.
- As many OEMs struggle with margins, Apple saw a blended gross margin of 42.5%. 36% for hardware products and over 70% for services.
- Regional growth across the board. Rarely do all regions see growth in an individual quarter. All regions saw tremendous growth with Americas being the smallest growth at an admirable 35%.
- Recently announced AirTags will give some incremental revenues in coming quarters—especially Q4 2021.
- Apple is also being hit by chip shortages. It warned that chip shortages will reduce the June quarter’s revenues by $3 billion to $4 billion, mainly within the Mac and iPad lineup. Because of the uncertainty of the chip shortage, Apple did not give revenue guidance for the June quarter.
- In 2019, there was a lot of angst about the China market. The latest March quarter allays those concerns with China revenues growing 88% on strong iPhone, iPad and Mac sales.
- Apple has some nice corporate boasts. This is timely as there is political pressure on many technology names (Google, Amazon, Facebook etc):
- The new OS update will give users options to opt out of app tracking.
- Over $200 million in new, green investments are being made.
- The company is investing $430 billion and creating 20,000 new jobs in the US.
- Although there has been some controversy on the Google-Apple COVID contact tracing tech, it has been rolled out in some states. There are also useful vaccine and test tracking apps.
- More on these brags here.
The outlook for 2021 remains strong for iPhones as more countries and regions roll out 5G. iPad, Mac, TWS, and wearables all have good outlooks. With the growing installed base of Apple products, services will also see solid growth in 2021.