Innovation and a unique product portfolio helped Apple, Inc. (NASDAQ: AAPL) stand out among the other tech firms, but the company owes its success mainly to the popular iPhone brand. Once again, the iconic smartphone has proved to be unstoppable, even by a global catastrophe like the coronavirus pandemic.
iPhone Sales Rebound
The gadget giant brought cheer to its stakeholders this week by reporting record results for the first quarter, with the highlight being the rebound in the sales of the iPhone, its flagship product. But the excitement was marred by the management’s cautious outlook for the current quarter, which triggered a modest stock sell-off soon after the announcement. While confirming its bullish view on the core business, Apple’s executives warned that certain segments like Wearables, Home, and Accessories, would grow at a slower pace this year.
The upbeat investor sentiment has been adding to Apple’s market value consistently, making it the only public company so far to cross the $2-trillion-mark. After breaking almost every financial record, Apple looks poised to continue the success story this year, once again making the stock a lucrative investment option. It needs to be noted that the company ended the first quarter with $196 billion of cash.
On the flip side, while speculation is rife about Apple’s future projects — from electric cars to virtual reality products — the management is yet to provide a clear picture about the upcoming offerings.
In a blockbuster quarter that underscored Apple’s ability to sail through challenges, revenues crossed the $100-billion mark for the first time in history. The top-line rose about 21% to $111.4 billion in the December-quarter, far exceeding the market’s prediction. That translated into a 34% growth in earnings to $1.68 per share. Interestingly, all the main business segments and geographical regions registered double-digit growth, with total iPhone sales growing 17% to about $66 billion. To a great extent, the strong sales performance can be attributed to the new work/study-from-home culture where gadgets like cell phones and PCs play a key role.
A few months ago, Apple unveiled the latest version of its top gadgets including the 5G-compliant iPhone 12. That, combined with the other new offerings like Apple TV+, Apple Arcade, Apple News+, and Apple Card should catalyze growth going forward. Commenting on the latest quarterly results, Apple’s CEO Tim Cook this week said that the outcome would have been much better if operations were not disrupted by the pandemic. But Cook withheld guidance for the remainder of the year, as he did in every other quarter since the onset of the virus outbreak.
“This was the first quarter of the Apple One bundle, which brings together many of our great services into an easy subscription; and with new content being added to these services every day, we feel very optimistic about where we are headed. The App Store ecosystem has been so important as individuals, families, and businesses worldwide evolve and adapt to the COVID-19 pandemic, and we want to make sure that this unrivaled engine of innovation and opportunity continues,” he added.
At the Bourses
Apple’s stock gained about 7% so far this year, after setting new records regularly in the past several months. Though the shares pared a part of the recent gains after Wednesday’s earnings report — thanks to the management’s unimpressive guidance — they stabilized after today’s opening.
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