Against all odds, Apple continues on its way

Apple’s second-quarter revenue hit $97.2 billion, up 9% year-on-year.

Apple is not (yet) affected by the supply difficulties that affect almost all industries. In the first quarter, the group saw its turnover reach a new historic high, at 97.2 billion dollars, an increase of nearly 9% over one year. Its net income, up more than 8%, reached $56.9 billion.

Sales of Macs, iPhones, accessories (AirPods, Apple Watch, HomePod, etc.) grew year on year. Only the iPad escape the euphoria. In total, the group’s device sales reached 77.4 billion dollars in the first quarter, (+7%). iPhone sales rose 5% in a declining market. They were driven by the still strong demand for the iPhone 13 (launched this fall) and revitalized by the launch of the new iPhone SE, at more affordable prices. But the prize goes to the Mac. Apple computers are selling like hotcakes, up 15%. The brand’s bet on its new M1 processors, which are more powerful than those of its competitors, is paying off.

In the context of delays, even interruptions in the delivery of components, which slow down and sometimes prevent the production of automobiles or computer equipment, Apple stands out. “I think we are doing a reasonably good job moving forward at the moment in a difficult environment remarks Apple boss Tim Cook with deliberate modesty.

Service Success

Apple is not immune, however, to headwinds. “Almost all the factories” in the Shanghai region on which Apple depends for its production have resumed their activity, says Tim Cook. The latter fears the effects on supply and demand for Macs, iPhones and iPads of the reconfinements in China. He estimates between 4 and 8 billion dollars the shortfall that this situation could cause.

Our production constraints are significantly lower than in the previous quarter

Tim Cook, President of Apple

But the management of Apple is mainly concerned about the possible impact of the economic slowdown in Europe. At the moment, Apple’s suspension of sales in Russia is not too serious. The country represents only one percent of its turnover, and barely more in terms of profits. “Our production constraints are significantly lower than in the previous quarter… But the Covid is difficult to predict“, recognizes Tim Cook.

At the same time, the group increased its turnover in services by 17%, to 19.8 billion dollars. Tim Cook has placed this category at the heart of its strategy to make it a growth driver with strong resilience to the economic climate. The demonstration of the effectiveness of the system put in place is proving its worth in an increasingly volatile international environment. The group prides itself on having 825 million paying subscribers to its various offers (Music, Apple TV+, etc.).

The level of confidence of the company in its capacity to manage the difficulties which are announced is high enough so that it continues to pamper its shareholders. Tim Cook announced a 5% increase in the dividend and increased its share buyback program to $90 billion.

SEE ALSO – Growth at 0% in the first quarter: “Yes, we have to worry, it’s not good news”, says Laurent Berger


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