How do you like them Apples? Cook drops 'record' 30 times* on conf call as iPhone sales up, services up, wearables up
Things looking better after that annus horribilis
A year ago, as Apple CEO Tim Cook mustered the strength to defend Apple's strategy in the face of shrinking sales and profits, he could have been forgiven for starting the day by privately weeping into his sugar-free cereal and unsweetened almond milk – the breakfast of Valley kings.
El Reg assumes there will have been no such repeat yesterday as the bossman – presumably – laughed all the way to last night's conference call with analysts: Apple is growing again. More specifically its iPhone, Wearables and Services divisions brought home the bacon.
"We generated revenue of $91.8bn, which is above the high end of our guidance," trilled Cook. That top-line figure was almost 9 per cent higher year-on-year for Apple's Q1 ended 28 December 2019 (PDF).
Not one to bend numbers to his own liking, the exec reminded analysts that this was the "fifth consecutive quarter of double-digit growth outside of iPhone including a new all-time record for services and another blowout quarter for Wearables."
It is worth remembering that crappy iPhone sales cost Apple dearly in its previous financial year – it lost $22bn in iPhone revenue for the 12 months ended 28 September. Its biggest division had lost its mojo. Cook blamed China, battery replacement and consumers for holding onto their phone for longer.
It was a comparatively better start to this corporate calendar: iPhone sales jumped 8 per cent to $55.957bn. This, the CEO assured investors, was on the back of "exceptional demand" for the 11, 11 Pro and 11 Pro Max.
Services, the area Apple sees as being key to its future – farming all those lovely device owners – pulled in $12.71bn, up 17 per cent. iCloud, TV, Music, Card and the App Store search ad biz came good, though the light was shone brightest by Cook on the App Store and AppleCare areas.
Over in the Wearables, Home and Accessories corner of Apple, sales passed a milestone, coming in at $10.01bn – bigger than Macs for the first time "setting an all-time record in virtually every market we track around the world", said Cook, who used the word "record" more than 30 times on the conference call. It's almost like he was trying to make a point.
Apple didn't say how many services it sells to each customer and, as Forrester veep and principal analyst Julie Ask pointed out last night, "this would provide a lot of needed insight on how much more revenue they can squeeze from existing customers versus Apple's dependency on new customer acquisition".
Apple did, however, claim that it has 480 million services subscribers.
Demand for AirPods was "phenomenal" and the Watch set an – there's that word again – "all-time record". The latter device is apparently having a "profound impact on customers' lives".
Now for the less-than-great news – areas on which the R-word was not liberally sprinkled: Mac sales were down 3.45 per cent to $7.16bn. Cook didn't explain the drop, though he was keen to add a line that the firm had launched its most powerful notebook ever in the quarter. According to Gartner's calendar Q4 PC shipments, Apple slid 3 per cent year-on-year and saw its share of market sales slip to 7.5 per cent. Intel shortages may have played a small part.
Apple revealed the iPad fared worse in its fiscal Q1, down 11.1 per cent to $5.977bn. Again, Cook chose to highlight the positives: growth in Thailand, Mexico, Poland, Malaysia, India, Turkey, the Philippines and Vietnam.
CFO Luca Maestri told analysts on the earnings call that both iPads and Macs had a "difficult year-over-year comparison due to the launches of MacBook Air, Mac mini and iPad Pro during the December quarter a year ago and the subsequent channels fill."
"Importantly, around half of the customers purchasing Macs and iPads around the world during the quarter were new to that product," he added.
Apple reported profit before tax of $25.9bn, up from $23.34bn, and paid taxes of $3.68bn versus a contribution of $3.94bn a year earlier. ®
* It may well be a record "record" 30 times; Cook used the word "record" 17 times judging by the Q4 transcript last year and 14 times on the Q3 '19 earnings call. We didn't have the heart to go further back than that, however.