Apple Surprises on the Upside

By Glenn Dyer | More Articles by Glenn Dyer

Apple has surprised on the upside, reporting record revenue for the December quarter (its first for its 2021-22 financial year) and topping sales forecasts for every major product it sells bar iPads.

In doing so it overcame the impact of component shortages that CEO Tim Cook had warned in October could lead to over $US6 billion in lost sales.

Revenue rose 11% to $US123.9 billion against $US118.66 billion in the final three months of 2020.

Apple’s smartphone market share in China reached a record 23% in the holiday quarter, when it was the top-selling vendor there for the first time in six years, according to a report from Counterpoint Research on Wednesday.

Profit jumped more than 20% to a record $US34.630 billion as the company’s gross profit margin rose to 43.8% from 41.7%.

This saw the shares reverse earlier weakness and rise more than 3% in afterhours trading.

iPhone revenues rise 9% to $US71.63 billion, services revenues were up 24% at $US19.52 billion; other product revenues rose 13% to $US14.7 billion, revenues from sales of macs were up 25% at more than $US10.8 billion but iPad revenues dipped 14% to $US7.25 billion as, faced with component shortages, Apple pushed the production of other devices over iPads.

Apple released its new iPhone 13 models in September, and this quarter was the first full quarter sales.

Services, which include iCloud, Apple Music, search licensing and App Store fees, continued growing strongly. Services is Apple’s most profitable business unit and its rise contributed to Apple’s higher-than-expected gross margin.

The company reported earlier this month that it had 745 million subscribers to its various services at the end of 2021.

Apple’s other products category includes Apple Watch and AirPods and the December quarter included sales from Apple’s latest Series 7 watch, which has a larger screen, and new AirPods.

Macs stood out with the strongest growth of any of Apple’s hardware lines after Apple launched new MacBook Pro models in October that featured a new Apple chip instead of an Intel chip.

Apple didn’t issue any future guidance, as it has been doing since early 2020 when the pandemic first erupted.


About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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