Apple’s Quarterly Profits Rise with Staggering iPhone Demand
Even the most bullish Wall Street expectations hadn’t gone as far as Apple’s actual holiday quarter earnings did and all because of a dubious trifecta. The company had chosen to sell more and more iPhones at an increased price, which enabled it to earn more on each sale. According to the details provided by the Cupertino, California giant, it sold about 46% more phones in the quarter as compared to last year, which is about 74.5 million devices. Furthermore, as opposed to the year earlier, the firm had also raised the average selling price of the devices by $50. The total shows that the company actually sold 34,000 phones every hour.
Tim Cook, the Chief Executive Officer of the American technology giant said that the demand for the phones was simply staggering and comprehending the volume was quite difficult. Even though the iPhone maker has seen nearly a tenfold increase in its revenue in the last decade, the results were still extraordinary. As a matter of fact, the results were a reminder of the heyday in Steve Job’s era when it was routine for the iPhone demand to be on top of forecasts. In some ways, the results can even be considered better than that time because nowadays the company has to deal with a lot more competitors and the growth of smartphones has slowed considerably.
The two new phones the iPhone 6 and the iPhone 6 Plus with larger displays were immediately snapped up by consumers when they were launched in September. It took years for Apple to regain its position in the market after it had ceded so much market share to its rivals. For weeks, after launching the new devices, the iPhone maker had encountered supply shortages in important strongholds such as the US and also in emerging markets such as China.
The company had predicted that existed customers would be prompted to upgrade their devices to the new ones that were being launched. Mr. Cook also mentioned in its interview that they are trying to lure customers of devices based on the Android operating system of Google Inc. He said that they had managed to attract a large number of users from the Android OS and they were extremely happy with that fact. For the fiscal quarter that ended on 27th, December 2014, the company’s earnings totaled $18 billion. This is a 38% increase as opposed to last year in the same period when its earnings had been $13.1 billion.
There was also a sharp rise in the earnings per share, which were $2.07 before and had reached $3.06, making it a 48% increase. This was primarily because of the share buyback program of the company. The revenue also saw an increase of 30% as it went from $57.6 billion to $74.6 billion. This was way above the expectations of the analysts who had predicted revenues of $67.7 billion and a share price of $2.60. The question is whether the momentum can be retained by the company with its next iteration.