Apple just had its biggest quarter in company history. A few observations.
I’m going to pull a few data points from Jason Snell’s recap of Apple’s quarterly earnings call and comment on the key things we can take away from Apple’s historically large quarter:
Apple’s latest quarterly results are out. And they’re big. It was an all-time revenue record, at $123.9 billion. The company made a record $34.6 billion in profit.
Having observed Apple closely for over two decades, I can remember a time when Apple had a relatively small amount of cash on hand, was frequently rumored to be an acquisition target (including by companies that no longer exist), and was frequently referred to in the press as “beleaguered.” In those days I was actually pretty bullish on Apple’s future due to the leadership of Steve Jobs and the excellent products (and product strategy) coming from Apple. That bullishness has served me well. Tim Cook is no Steve Jobs, but he’s certainly been an excellent steward of Apple over the last decade.
Mac revenue also reached a new all-time high at $10.9 billion, and iPhone revenue also peaked at $71.6 billion.
Not much to say about the iPhone other than that it continues to be an outrageous success, even fifteen years into its life cycle, and this despite some excellent hardware and software over on the Android side. Apple’s given us no reason to the think the iPhone won’t continue to be an industry-leading product for Apple.
Mac revenue being at an all-time high speaks well of the market’s reaction to Apple’s move to Apple silicon chips powering the Mac. And this also comes at a time when supply of new the MacBook Pro was constrained, both by demand and by supply chain issues. With the rest of Apple’s Mac line expected to make the transition to the M-family of chips by the end of 2022, Mac revenue growth should continue.
The iPad’s revenue was $7.2 billion, down sequentially and year-over-year, but still among the five best iPad quarters in recent years.
iPad revenue has often been difficult to contextualize over the years. There’s no question that the iPad now has its best lineup of products ever, and that every year it becomes more and more of a capable computer in its own right. But it’s always been something of a “tweener” product. People feel like they need an iPhone for portable computing, and a Mac for “real work,” leaving the iPad as a product they feel that they can either skip over, or skimp on. However, we can’t overlook the impact of supply chain issues on iPad sales in this recently ended quarter. I can personally attest to the fact that iPads were incredibly hard to come by with long fulfillment times on orders.
Services kept its upward growth path, setting a new record at $19.5 billion, and Wearables/Home/Accessories likewise set a new record at $14.7 billion.
Apple TV+ is miles behind Netflix and Apple Music is in second place to Spotify, but it’s clear that Apple is achieving results from its services division. Apple doesn’t have to have an industry-leading number of subscribers in any one of its services categories to make a lot of money, and they’re clearly compounding their success in this area.
With wearables, Apple’s Apple Watch and AirPods lines are massively successful and you see them everywhere. I hope some of the revenue growth comes from HomePod mini sales as well (as I’m sure it does), because I want Apple to continue delivering new products in that category.