Apple iPhone Sales In Fiscal Q2 2017 Fell Short Of Expectations In Anticipation Of The iPhone 8

Must Read

Over 13.6 Crore Jobs in India Would Be Lost Due to Coronavirus Outbreak!

The 21-day lockdown induced by the deadly outbreak of the Covid-19 has completely dismantled and disrupted the...

Should Apple Take Advantage Of Disney’s Stock Crash And Acquire It?

The Covid-19 outbreak caused Disney’s stock to fall below $100 for the first time in the last...

Will YouTube’s New Feature Kill TikTok?

After Facebook, it's Youtube that has been closely monitoring the exceptional growth of TikTok. And, the new...

Apple Inc. (NASDAQ:AAPL) released its financial results for the second fiscal quarter of 2017 on May 2, 2017. Apple is one of the biggest players in the smartphone industry and accounted for nearly 92% of the smartphone industry’s profits in Q4 2016. So how well did Apple do this time? And what trends are likely to hold in the future? Let’s find out.

iPhone Sales And Revenue: Short Of Estimates

This quarter was not the best for Apple, both in terms of smartphone shipments and revenue. Apple reports a revenue of $52.9 billion, which is slightly lower than Thomson Reuters consensus estimation of $53.02 billion. Nevertheless, revenue was up from the $50.6 billion during the same period last year. However, the deficit in smartphone shipments is much greater. Apple shipped 50.8 million smartphones during this period, lagging behind the 52 million estimated by FactSet, and the 51.12 million shipments made same time last year.

 

Apple’s net profit for this quarter comes out to nearly $11 billion at $2.10 per diluted share as opposed to $10.5 billion during the same period last year at $1.90 per diluted share.

Advertisements

iPhone Drives Revenue As iPad Sales Slip

Apple iphone sales q2 2017

Once again, it was the iPhone which was the biggest growth driver for Apple this fiscal quarter. The 50.8 million iPhones that Apple sold accounted for nearly 63% of Apple’s revenue.

The second biggest revenue share was claimed by Apple’s fledgeling services business, which experienced 18% YoY growth. With 13% of the revenue share, this was Apple’s highest services revenue ever for a 13-week quarter. Growth in this segment can be attributed to the successful reception of Apple Music. This is good news for Apple who has been looking to expand their services business.

There have even been reports of a possible buyout of Disney to expand their service business.

Sales of Macs also showed significant improvement as Apple sold 4.12 million units of Macs with a combined revenue of $5.84 billion. This represents a growth of 4% in shipments and 14% in revenue compared to the same time last year when Apple shipped 4.03 million units and had $5.12 billion in revenue. This can be attributed in large part to the release of the revamped MacBook Pro line in October of 2016.

On the flip-side, iPad sales have shown an alarming downward trend. Apple sold 8.92 million iPads for a combined revenue of $3.89 billion. This represents a 13% shipment decline YoY, whereas revenue fell 12% YoY. This is a far cry from Apple’s first fiscal quarter of 2014 when Apple sold 26 million iPads for a combined revenue of $11.5 billion.

Advertisements

The rest of Apple’s revenue was made up by the Apple Watch, Airpods and Beats products. These products combined to make up $2.87 billion in revenue, up from $2.19 billion same time last year.

Notable Trends

  • Personal Computers Making A Comeback – The significant growth in Mac sales clearly shows that the desktop is not quite dead yet. This resurgence in popularity could yet mean that PCs can make an unlikely comeback from the brink of rapid decline.
  • The iPad Has Lost Its Way – While the iPhone has continued its upward climb, Apple’s other major product has been suffering. Revenue is down 66.17%, and shipments are down 65.7% in just three years. Apple needs to make drastic changes to the iPad design if they want to arrest this decline and keep the iPad relevant.
  • iPhone Shipments Were Disappointing – Shipments of iPhones in this fiscal quarter fell short of expectations. Apple CEO Tim Cook has attributed to buyer holdout in anticipation of upcoming Apple releases, the iPhone 8 being foremost among them. Sales are likely to explode during the upcoming iPhone 8 super-cycle.
  • Apple’s Service Business Is Taking Off – Apple’s rapid growth in their service segment will come as good news for investors. This not only helps diversify Apple’s portfolio, but it also provides other avenues for growth. This also reduces Apple’s heavy dependency on the iPhone.

Forecasts For the Future

Apple has also made some forecasts for their upcoming third fiscal quarter:-

  • Apple expects a revenue between $43.5 billion $45.5 billion. This is perfectly in line with Apple’s seasonal product cycle as Apple’s sales tend to drop off during this period.
  • Operating expenses are expected to be in the region of $6.6 billion to $6.7 billion.
  • Apple project their income tax/miscellaneous expenses to total to $450 million in the upcoming quarter.
  • CEO Tim Cook is expecting a 6.5% to 10% tax rate for a one-time “tax holiday” when Apple intends to repatriate their foreign income. This could be instrumental in any possible mergers Apple is planning.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Penalise Users Spreading Fake Information On TikTok And Facebook: Indian Government

The increasing fake news on Facebook or TikTok is only making the already complex situation worst for...

Fake Reviews Hurting Consumer Loyalty: Brands Urged To Stop With Shady Tactics!

You might be well aware of the increasing influence of Fake news on people, but have you thought about the impact of...

COVID-19 Triggers Rise In Unemployment in India: 50 Million Jobs Lost In Just 2 Weeks

The state of unemployment in India was never so bad as now. The country is now staring at the face of large...

Skype Trying To Replicate Zoom’s Success With Its New Feature!

It seems like the meteoric rise of the Zoom video conferencing app amid the work from the home situation caused by the...

Should Apple Take Advantage Of Disney’s Stock Crash And Acquire It?

The Covid-19 outbreak caused Disney’s stock to fall below $100 for the first time in the last one and a half year...

Covid-19 Thrusts Graduating Students From IIM and IITs Towards Uncertain Future!

The mayhem of the COVID-19 outbreak has been affecting all parts of the economy and now it has finally arrived at the...

In-Depth: Dprime

YouTube Should Have Bid Adieu To Dislike Button Much Earlier?

Online video sharing platform YouTube can be a ruthless place for content creators targeted by 'dislike mobs'. And the site owners totally understand that...

Facebook Has Pulled Off A Masterstroke By Integrating Its ‘Family Of Apps’?

It’s indeed hard to believe that ONE man sitting at Menlo Park, oversees how nearly a third of the world’s population interacts with each...

Facebook’s Crunch Conquest: By Relying Largely On The US Market, Is Facebook Running a Risk?

Two billion! That's Facebook, Inc. (NASDAQ: FB) for you - Right when you thought that this social-media giant has already connected the entire world, it's...

More Articles Like This