“Apple reported the strongest ever quarterly revenue in India and highest quarterly Mac sales, as the company beat analyst expectations for Q4 2019”
Apple CEO Tim Cook has revealed that the iPhone 11 is helping the company rake in stronger-than-expected sales, stating that the latest iPhones are off to a “very, very good start” during the company’s Q4 2019 earnings call. Cook cited the decreased starting price of $699 (Rs 64,999 in India) for the new iPhones as a positive, an important factor for iPhone sales reviving in recent times, as the company beat analyst expectations to report $64 billion net revenue for the quarter. For iPhones, despite the positive impact of the new devices, the segmental revenue still showed a 9.2 percent annual decline to now stand at $33.36 billion for the quarter.
A few things here are important to be noted — first, while the financial report is for Q3 2019 (July-September), Apple reports the same as Q4 because of the accounting cycle that it follows. More importantly, the iPhone 11 sales were only a part of 10 days in the entire quarter, so it would be wrong to judge the iPhone sales of this quarter in line with Cook’s claims of strong iPhone 11 demand. Going forward, the Q4 2019 (and Apple’s Q1 2020) report will provide a clearer picture in terms of revenue generated from iPhone 11 sales, since this will be the first full quarter during which the iPhone 11 would have been available. Additionally, it would also include the holiday season, which is when sales are typically stronger than in other quarters.
Interestingly, despite its annual decline, iPhones still remain Apple’s single largest earning entity, accounting for 52 percent of the company’s overall quarterly revenue. Services continue to perform strongly for Apple, with CFO Luca Maestri stating during the earnings call that Apple now has over 450 million paid subscribers across all its services, up from 330 million a year ago. Maestri further revealed that the company is now on track to meet its goal of hitting 500 million paid subscribers in its network by the next quarter, corroborating Cook’s revelation of services revenue growing from $10.6 billion a year ago, to $12.5 billion now. On overall terms, Apple’s revenue from services grew 17.9 percent annually.
In terms of India, Apple noted that the company saw the strongest quarterly revenue ever in select markets, among which India was also noted. Apple also stated that Mac sales for the quarter reached its highest ever for any single quarter in India, bouncing back from the 70 percent decline in profits and 19 percent decline in revenue that it reported earlier for 2018-19, in the country. No information was revealed regarding the iPhones, but the India numbers did fall in line with analyst expectations of Apple India seeing a revival in fortunes.
Mac sales, however, were down globally by nearly 5 percent to account for $6.99 billion in revenue. That said, Apple rode on strong increase in revenue from wearables/home products and iPads, which accounted for $6.52 billion and $4.65 billion, respectively. The overall numbers show a strong quarter for Apple, leading the company to project $89.5 billion in revenue guidance for the next quarter, as compared to its $84.3 billion revenue in the same quarter, a year ago. Alongside the new iPhones, Cook mentioned the newly announced AirPods Pro as a bright prospect, and it will be interesting to see how the new earbuds reflect in Apple’s performance, going forward.