Apple reports record Q2 revenues of £38bn but iPad sales fell again
Apple has recorded its best ever second quarter results thanks to a 40 percent increase in iPhone sales and the best ever performance from the App Store, although iPad sales fell by almost a quarter during the period.
Revenues increased by 27 percent to $58 billion (£38bn) while the company made a profit of $13.6 billion (£8.9bn), up from $10.2 billion (£6.7bn), year on year with the iPhone again providing the bulk of the income.
“We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” said Tim Cook, Apple’s CEO. “We’re seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch.”
Record Apple results
iPhone revenue increased by 55 percent to $40.28 billion (£26.44bn), while Mac sales remained relatively static and generated $5.52 billion (£3.62bn). iPad revenue slumped by 29 percent to $5.42 billion (£3.6bn), but services income, which includes sales from iTunes, App Store, Mac App Store, Apple Pay and licensing, rose by nine percent to $5 billion.
The US remains Apple’s largest market and accounts for $21.316 billion (£14bn), but revenue from China jumped from $9.84 billion (£6.46bn) last year to $16.82 billion (£11.04bn) – more than the $12.2 billion (£8.011bn) earned from Europe.
“Apple’s forays into emerging markets have begun to bear fruit as iPhone sales in China are surpassing those in the US plus international sales account for 69 per cent of total sales in the most recent quarter,” said Loizos Heracleous, professor of strategy at Warwick Business School.
“The decline in iPad sales is more than made up for by higher iPhone sales, and the introduction of the Apple Watch represents significant potential for the company. Apple’s plans to return $200 billion to shareholders through share buybacks and dividends represents a departure from previous company policy and is another plus for investors.”
The company predicts revenue will fall to between $46 and 48 billion (£30.2 – £31.52bn) during the third quarter despite the aforementioned launch of the Apple Watch last week. More than one million pre-orders for the smartwatch are reported to have been placed online, but supply is believed to be limited and devices will not appear in Apple’s retail stores for some time.
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