Apple laughing all the way to the bank – with profits of $5.3m per hour
Hardware stalls, services up, and TV push coming – now, let's look at Samsung...
Apple continues to display all the characteristics of a money-making machine, with record results for the third quarter of the year.
This was the iGiant's strongest fiscal third-quarter results in its history, according to Apple, and its fourth straight quarter of double-digit revenue growth. In a conference call with analysts, CEO Tim Cook was so pleased with the results that he even managed to break his usual monotone delivery for a small laugh on minute 53 of the hour-long chat.
Today we are proud to report best June quarter ever, thanks to strong growth in iPhone, services and wearables," he said. "It's the strongest level of growth in our last 11 quarters."
For its third quarter of the year, the three months to June 30, Apple on Tuesday reported:
- Revenues were $53.3bn, up 17 per cent on the year-ago quarter. That's $24.7m an hour on average over the 90 days.
- Net income was $11.5bn, up 32 per cent from this time last year. That's $5.32m an hour on average over the quarter.
- Earnings per share grew 40 per cent from the second quarter of the previous year to reach $2.34 per share. Cook announced a $0.73 cash dividend for shareholders.
- iPhone sales grew just one per cent, but Apple still managed to ship over 41 million units. Cook said that the strongest sales growth was seen in the high-end iPhone X segment – smartphone revenues rose 20 per cent on the year thanks to shipping more expensive models, essentially – and that bodes well for the iPhone X Plus handset expected later this year.
- iPad sales also grew only one per cent to 11.5 million units. Unlike the iPhone, revenues fell 5 per cent. This seems to be down to the newest iPad being lower cost and that the more-expensive Pro version is due for a refresh and buyers are most likely holding out for the new kit before buying.
- Mac sales declined nine per cent over the quarter, with 3.7 million units sold. Revenues were down five per cent at $5.3bn.
- Services were where Apple saw some really stellar growth, with sales up 37 per cent to $9.5bn. Apple Music sales were up 50 per cent on the year, as were cloud services revenues. Cook said the company was on target to double its services revenue from 2016 by 2020, and to carry on growing from there.
While sales were disappointing for its core hardware products, Apple's other hardware did rather well, with sales of the Watch, AirPods and ancillary hardware up 60 per cent. Cook said the phenomenon of seeing so many people using AirPods took him back to the days after the introduction of the iPod and the proliferation of white headsets everywhere.
As for the services side, Cook said that Apple would be making more moves into expanding Apple TV and content production. The company has hired two prominent Hollywood types, has a content deal with Oprah and Cook said that cord cutting by consumers was happening faster than anyone had anticipated.
"Apple has cut out a space for marketing services and TV would be one of those," Carolina Milanesi, principal analyst at Creative Strategies, told The Register. "Now they are seriously looking at content. If you look at Amazon and Netflix it requires a lot of capital to exploit this market but Apple is not short of cash." ®
Samsung Galaxy S-Nein
Earlier this week, Samsung Electronics emitted its fiscal second-quarter results for 2018, the three months to the end of June. Profit was up 1.7 per cent year-on-year to 10.98 trillion Korean won ($9.8bn), and revenue fell 4.1 per cent to 58.48 trillion Korean won ($52.3bn).
Those sales and net income are on a par with Apple's albeit when you include all the stuff Samsung sells, from smartphones and tellies to smart fridges and air-con units.
Samsung Galaxy S9 phone sales were said to be "slow"; DRAM and NAND flash demand led to healthy semiconductor sales despite dipping flash prices, we're told; and demand for flexible OLED screens was weak while top-end TVs were strong in terms of sales – thanks in part to the World Cup, apparently.