Apple reported its earnings yesterday, and the numbers wowed its investors. It reported revenue of $91.8 billion for the fiscal quarter, which was up nearly 9% from the previous year. The earnings per share were $4.99, exceeding analyst’s expectations.
The company surprised Wall Street’s analysts; Apple blew analyst's projections out of the water, which helped the company’s stock sky rocked in after-hour earnings.
The message was clear; the company is back in growth and firing on all cylinders. The fact that Apple has been able to revive its iPhone growth among its fierce competition and also made wearable products part of its crown jewel is something remarkable.
The holiday-quarter revenue report confirmed that the demand for iPhones has rebounded. The iPhone is still the main engine, while the models iPhone 11 and iPhone 11 Pro are still well received in the market—thanks to the fantastic new camera features.
Apple’s iPhone cycle explains that the customers upgrade their phones every three to five years and millions of older versions lose software support—a strategy designed to spur new purchases.
Moreover, the demand in China has been exceptionally strong. It is encouraging news for investors because previous releases experienced a shrinking market share in the years 2018 and 2019. Apple generated over $56 billion in revenue from the sale of iPhones during the first fiscal quarter. In simple terms, the number has improved by nearly 8% from the previous year, 2019. Remember, the sales plunged by 15% in 2018.
Apple’s customers developed a love for wearable devices which brought about a remarkable comeback for the company, especially when comparing these numbers with those from a year ago.
Apple’s revenue from its services such as iCloud storage, Apple Store and Apple Music was robust; it generated revenue of $12.7 billion which was up 17% from the same period last year. However, the area of concern is that Apple News+, the company’s digital magazine subscription, hasn’t built any attraction. Also, Apple hasn’t provided much clarity in terms of is strength regarding Apple TV+, the Apple Arcade, and the Apple Card. The company has invested heavily in Apply TV+, and a lot of hopes have been pinned in this new area of business.
There wasn't much detail when it came to the coronavirus, Tim Cook, the company’s CEO, only said that they are closely monitoring and the ongoing situation in China. He provided empty assurances by saying that they are working closely with employees. The fact is that all of the company’s phones are made in China, and if there is any hindrance in production, it is going to impact its upcoming quarter.
Speculators are paying close attention, and if Apple fails to address the issue, it will likely pay a higher price in the future.
