Apple Sets Record Quarter Thanks to China’s 5G Appetite

Despite an abundance of domestic options, Chinese consumers are still showing Apple their love. On April 28, the Cupertino-based tech giant posted record revenue of 89.6 billion, up 54 percent year-over-year, for the three months ended March 27. International sales drove 67 percent of this revenue, with Greater China in particular pulling its weight, surging 87 percent to 17.7 billion. “We were very pleased with our performance in China,” said Apple CEO Tim Cook on an earnings call. “We set a March quarter revenue record and grew strong double-digits across each of the product categories and so the revenue growth was broad.” Although this dramatic increase was in comparison to Q2 last year, the period China entered into lockdown, strong performances from Apple’s signature products shouldn’t be overlooked. The iPhone 12, its first 5G smartphone, was part of the reason China rose higher than other markets, Cook said. Mac and iPads also proved a big hit, with two-thirds of Chinese consumers buying them for the first time. The rest of the Asia-Pacific similarly held its own, boasting a staggering 94 percent jump in sales to 7.5 billion. In fact, Apple set new March quarter records across its geographic segments with at least 35 percent growth in each. Even Europe, impacted by prolonged store closures, climbed 56 percent and beat the company’s own expectations. By product categories, the iPhone was up 66 percent in revenue to 47.9 billion from last year, solidifying its status as Apple’s profit powerhouse. Meanwhile, revenue for Macs grew 70 percent to 9.1 billion and iPads were up 79 percent to 7.8 billion. According to Cook, these two were “critically important tools” for customers to work and learn from home. While CFO Luca Maestri did not offer official guidance, he pointed out one thing that could rain on Apple’s parade. The ongoing semiconductor shortage, combined with a “very, very high level of demand” for both iPad and Mac, are expected to negatively impact June results by 3 to 4 billion. That said, Q2 2021 is the second quarter in a row with double-digit growth across all product categories, pointing to a promising trajectory for the smartphone maker. Moreover, the iPhone 12, which has only been on sale since September, should continue to give the company a boost, along with the new iPad Pro and iMac models which were not included this quarter. While an Apple a day may not keep the doctor away, it’s certainly keeping Cook and his shareholders happy.

Sectors

Insights

Company

Apple Sets Record Quarter Thanks to China’s 5G Appetite