Apple posts record revenues over Christmas

Apple announced record revenue numbers over the Christmas quarter on the back of increased demand for its latest iPhone models, easing concerns about the brand’s momentum. However, as the brand counts down to the tenth anniversary of its flagship iPhone, declining profit remains a concern.

With $78.4 billion (Dh288 billion) in total revenue as compared to $75.9 billion in the last quarter of 2015, the Cupertino-based giant clocked its best quarterly results yet. Profits over the quarter – the first in fiscal 2017 – dipped 2.6 percent to $17.9 billion. 

International sales accounted for 64 percent of the quarter’s revenue, Apple said in a media statement. The company shipped 78.3m iPhones over the three months.

“The strong performance shows how the iPhone remains Apple’s growth engine,” analyst Jack Kent, Director of IHS Technology, said in an email note. “Full year iPhone shipments were down in 2016, but the launch of the iPhone 7 and 7 Plus helped Apple return to growth in Q4.”

iPhones accounted for 69 per cent of revenues, the highest share since Q1 2015. It also validates Apple’s trade-off decisions regarding water resistance, removing the headphone jack and different camera technology on the 7 and 7 Plus. Apple’s results also indicate a higher iPhone average selling price, showing a shift in popularity towards larger screen Plus models, Kent said.

Apple CEO Tim Cook concurred. “We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch,” he said in a statement about the company’s record-breaking performance. “Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline.”

Helping Apple were the recall of the Samsung Note 7, which is thought to have led to a rebound in North American iPhone sales, and improved device and ecosystem technology such as IP67 water resistance and better camera performance. In Japan, the launch of the new FeliCa contactless payments technology was a particular boost. 

Going forward, the smartphone market appears to be coalescing around three major players, Kent added: Apple, Samsung and Huawei.