Apple has done well over the last few quarters — well enough to bring the best third fiscal quarter results in the company’s history. Beyond the impressive $81 billion in revenue reported for those three months, however, investors wanted to know if the company’s growth story is coming to an end. The best answer is that nobody knows, but Apple’s strategy of focusing on improving the iPhone and hooking more people to its services seems to be working great so far.
Apple is one of several tech companies that have reported positive financial results this week, exceeding Wall Street expectations. The Cupertino company said it made $81.4 billion in the quarter ending in June, which is a 36 percent year-over-year increase and well above the $73.3 billion predicted by analysts.
The iPhone remains a major driver of Apple’s overall revenue. The company sold enough units to rake in $39.6 billion, an almost 50 percent year-over-year increase. As noted by ZDNet, this could mean the company sold more than 56 million units if we assume an average selling price of around $700. Either way, the iPhone 12 reached the 100 million units sold milestone almost as fast as the iPhone 6, so the company may have enjoyed another volume supercycle.
Mac sales brought in revenue of $8.25 billion, which is a 16 percent boost when compared to the same quarter of last year and pretty much in line with expectations. iPad sales have seen a smaller but still healthy 12 percent increase, bringing over $7 billion, over 10 percent of the total revenue for the quarter.
Apple CFO Luca Maestri noted during the investor call that Mac and iPad naturally sold better as a result of the shift to working and studying remotely, but was hesitant to portray the pandemic as a boon for the company and its shareholders. Maestri also brought up how Apple struggled to meet demand due to supply chain constraints, and while the company was able to partly mitigate them in the last few months, the iPad may suffer in the coming quarters.
Apple’s transition to a homegrown hardware architecture has had some investors worried, but Maestri pointed out the last four quarters of Mac sales have been the best quarters of all time thanks in no small part to “the very enthusiastic customer response to our new Macs powered by the M1 chip.” The same is true for the M1 iPad Pro, which almost matched its previous sales peak even as Apple struggled to make enough of them to meet demand.
Last but not least, Apple’s services business was up 33 percent year-over-year, and the company now has 700 million paid subscribers — 150 million more than it had last year. This is the 16th quarter of growth in this area, and there’s a lot of potential for Apple to hook in more people in to its services in China, where a large percentage or Mac, iPad, and Apple Watch buyers were first-time customers.