Apple’s iPhone sales shrunk for the second fiscal year in a row due to the delayed launch of its next-generation blower – the only blemish on an otherwise solid set of profit & loss accounts filed in the middle of a pandemic.
At group level, Apple reported revenue of $64.698bn for its Q4 ended 26 September, up by some $658m on the year-ago quarter. Nearly all product divisions grew and Services was up double digits.
In a call with financial analysts, CEO Tim Cook hailed a “September quarter record, despite the anticipated absence of new iPhone availability during the quarter, and the ongoing impacts of COVID-19, including closures at many of our retail locations.”
iPhone sales in the three months came in at $26.4bn, down 20.7 per cent on the same period of fiscal 2019. In Q1, Q2 and Q3, iPhones grew and yet that final slip meant that, for the year, Apple’s phone business declined 3.2 per cent to $137bn. In fiscal ’19, iPhone sales fell $22bn year-on-year to $142.38bn.
The launch was held up by disruption in the supply chain caused by COVID-19 but Cook claimed demand for existing models was strong until the mid-September point when the iPhone 12 was originally due to launch.
“Greater China is the region that was most heavily impacted by the absence of the new iPhones,” said Cook. In the quarter, revenues Apple generated in the country dropped from $11.1bn to $7.94bn.
Bernstein analyst Tony Sacconaghi said he had “expected weakness” with Apple’s phone sales “due to channel inventory dynamics and the lack of next-gen iPhone sales in the quarter, both of which severely distorted seasonal patterns”.
Cook said early demand for the iPhone 12 and 12 Mini had been promising.
Mac sales jumped 29 per cent to $9.03bn and the iPad was up a whopping 45 per cent to $6.79bn, which CFO Luca Maestri said was “despite supply constraints… throughout the quarter”. The wider PC market has been unable to meet demand with CPUs, ICs, and panel shortages all blamed.
The Wearables, Home and Accessories (WHA) division jumped to $7.87bn from $6.52bn and Services – App Store, Cloud, Music, Advertising and Payment – jumped to $14.55bn from $12.51bn a year earlier.
In the Americas, Apple turned over $30.69bn in sales, up 4.6 per cent; $16.9bn in Europe, up 13 per cent; $5bn in Japan, up marginally; and $4.13bn in the rest of Asia Pacific, up 13 per cent.
For the year, Apple reported revenue of $274.5bn, with iPhones dropping to $137.78bn from $142.38bn, Mac rising 11 per cent to $28.6bn, iPads up 11.5 per cent to $23.7bn, WHA up 25 per cent to $30.6bn, and Services up to $53.7bn from $46.29bn.
Apple, which is facing challenges on multiple fronts including its legal spat with Epic, again refused to provide a forecast for the next quarter due to the uncertain economic environment created by COVID-19. Who can blame it. ®