It’s all about the iPhone. Apple just announced huge iPhone sales for the final three months of 2014 (fiscal Q1). The company sold 74.5 million iPhones vs. 51 million a year ago. And last quarter Apple said it shipped its “one-billionth iOS device.”
As you might expect from those numbers Apple had record quarterly revenue of $74.6 billion and profit of $18 billion, another record. A year ago revenues were $57.6 billion and profit was $13.1 billion. Non-US sales were responsible for 65 percent of revenue, $16.1 billion of which came from China.
Apple has $178 billion in cash on hand (that’s a lot of cash). Apple is up in after-hours trading.
Here are the product line numbers:
iPhones: 74.5 million units, $51.2 billion in revenue
iPad: 21.4 million units, $8.9 billion in revenue
Macs: 5.5 million units, $6.9 billion in revenue
iTunes and apps: $4.7 billion in revenue
Other: $2.7 billion in revenue
Notes from the earnings call:
CEO Tim Cook:
More than 750 banks and credit unions have signed on to support Apple Pay
Apple Pay more than $2 out of $3 contactless payments in the US today; higher for some merchants
2015 “will be the year of Apple Pay”
He touted the IBM enterprise partnership and Health Kit developer adoption and hospital partnerships
CFO Luca Maestri:
iPhone unit sales doubled YoY in China, Brazil and Singapore
iPhone ASP $687 leading to iPhone revenue growth of 57% YoY
Working with 375 carriers globally
Mac sales increased 14% YoY; $6.9 billion in revenue
iPad sales were down vs. a year ago but still delivered nearly $9 billion in revenue
Financial analyst questions/answers:
There was substantial discussion about currency fluctuation and its impact on Apple’s gross margins and potential foreign sales
Question about the relative popularity of iPhone 6 and 6 Plus. Cook: “There’s clearly a geographic preference difference [for the iPhone 6 Plus]”
Question re sustainability of iPhone demand . . . Cook: We’re incredibly bullish about the iPhone going forward . . . we’re doing well in virtually every corner of the world. Only a small fraction of the installed base has upgraded. We also had the highest number of customers new to the iPhone than in any prior launch (and highest Android switcher rate vs. past launches)
Question about Apple Watch and launch timing . . . Cook expresses enthusiasm without saying much of substance. Device will become available in April
Question about competition in China from Xiaomi . . . Cook: People love Apple products. Our online revenues in China last quarter were more than the sum of the last five years.
Question re iPad future and performance . . . Cook: I’m still very bullish on the iPad. First time buyer rates are very high. Over the long arc of time the iPad is a great business. The upgrade cycle is longer, probably between an iPhone and a PC.
Apple TV — Cook: We’ve sold over 25 million Apple TVs now. Re Apple Pay, “We’re just in the first inning.” “I’m shocked by how many merchants could implement Apple Pay in the heart of the holiday season.”
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