iPhone 7 Drives Apple To Record-Shattering sales

by CXOtoday News Desk    Feb 02, 2017

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Apple’s fortune is always tied to the iPhone. The company generates about two-thirds of sales from the device. However, like other handset makers struggling to retain their position in the market, Apple too witnessed its iPhone sales to drop for the first time ever in 2016. While the iPhone 7 was not an enigma like iPhone 6 that was launched two years ago, it still offered some features that such as better cameras and water resistance, and in turn boosted its sales, such that the US tech giant reported its highest ever quarterly revenue.

The company reported net sales of $78.4 billion (approximately Rs 5.2 lakh crore) for 2017’s first quarter ended December 31, 2016.International sales accounted for 64 percent of the quarter’s revenue.

“We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch,” Apple CEO Tim Cook said in a press release. “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.”

Cook noted the company saw especially strong demand for the iPhone 7 Plus, the bigger version of the phone that also has a more advanced camera with two lenses. A higher percentage of the total iPhones sold came from the Plus model than in the past, he said during a call with analysts.

The iPhone 7 helped Apple take back the title of the world’s top smartphone vendor in the December quarter, according to a Strategy Analytics report. [Read the full report here]

 Globally, 18 percent of phone shipments in the period came from Apple. Samsung, which faced a massive Note 7 recall due to faulty batteries, dropped to second place, the report said.

“This was the iPhone’s best performance for over a year, as Apple capitalized on Samsung’s recent missteps,” Strategy Analytics analyst Neil Mawston said.

“Our outstanding business performance resulted in a new all-time record for earnings per share, and over $27 billion in operating cash flow,” said Luca Maestri, CFO, Apple Inc. “We returned nearly $15 billion to investors through share repurchases and dividends during the quarter, bringing cumulative payments through our capital return program to over $200 billion.”

Overall revenue climbed 3.3 percent to $78.4 billion. Wall Street anticipated revenue of $77.4 billion. (In October, Apple projected sales of $76 billion to $78 billion, above analysts’ estimates at the time.)

Apple expects revenue between $51.5 billion and $53.5 billion for the current quarter. Earlier this week analysts had projected a second-quarter of $54 billion, up 6.9 percent from a year ago.

The iPhone 7 models, were launched in September and sported an improved camera but ditched the traditional headphone socket now account for about 17% of Apple’s phone sales, according to research firm Localytics. Apple said it had sold 78.3m iPhones in the three months to 31 December, up from 74.8m a year before.

It reported revenue of $54.3bn from iPhone sales, along with $7.2bn from the Mac, $5.5bn from the iPad and $4.0bn from other products, including the Apple Watch. While the company doesn’t break out Apple Watch sales and unit numbers, but Cook said both set a record in the quarter, he said holiday demand was “so strong we couldn’t make enough,” he said.

Sales from its services division which includes the App Store, Apple Music and iCloud were $7.1bn. The segment is now close to surpassing the Mac as Apple’s second biggest source of revenue.