Apple Inc posted a $10.7-billion net profit on revenue of $49 billion for the April-June quarter
The company’s performance during the quarter did not look particularly grim in any way — certainly not in Chief Executive Tim Cook’s statement after the announcement of the result. Cook said: “We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch… The excitement for Apple Music has been incredible, and we’re looking forward to releasing iOS 9, OS X El Capitan and watchOS 2 to customers in the fall.”
However, the excitement of Cook and the exuberance of the company’s quarterly performance did not seem to have gone down very well with investors. Not only did Apple Inc’s stock slide on Nasdaq, it also brought down key indices, particularly the technology benchmarks, along with it. The stock slid in extended trading on Tuesday and through Wednesday’s trading to wipe out as much as $40 billion from Apple Inc’s market value.
What exactly went wrong? Here’s a look at 5 key things that the company’s quarterly results show:
1. iPhones sales have disappointed
Though the company posted 35 per cent year-on-year increase in iPhone sales in the April-June quarter — 47.53 million units — this was below the expectations of analysts, who expected the company to sell at least 50 million units.
2. Has Apple Watch been a hit?
Apple did not disclose the exact sales numbers for its smartwatch. But the analysts who studied the break-up carefully, especially the ‘other product’ section, determined that the much-hyped device might have got a lukewarm response from buyers in its first quarter in the market.
3. Services gaining traction
The company’s services section, under which it offers products like iTunes, App Store, AppleCare and Apple Pay, increased its share of Apple’s overall revenue. It rose from being the fourth-largest vertical to third-largest in the June quarter. Services sales rose 12 per cent during the quarter to $5.03 billion. According to Cook, within services, the App Store’s revenue rose 24 per cent.
4. Mac’s show better than iPad’s
The company’s sales of its Mac computers increased nine per cent during the quarter to 4.7 million units. This was up to analysts’ expectations. While the Macs have consistently outperformed the global personal computer market lately, the sales of the iPad tablets have been disappointing. Tablets’ sales continued to be weak in the June quarter — iPad sales fell 18 per cent to 10.93 million units.
5. China still a key market for Apple
The company’s growth in China remained robust in the June quarter — the sales in that country nearly doubled, making China account for 27 per cent of Apple’s overall revenue in the quarter. Despite a stock-market turmoil in China, Apple has not seen a sales slowdown there. Its revenue in China reached $13.23 billion in the June quarter.
