5 Biggest Takeaways from Apple’s Q2 Earnings Report
Apple on Tuesday announced its quarterly results for Q2 2018 in a press release and earnings call with CEO Tim Cook and CFO Luca Maestri. Overall, Apple says that Q2 2018 is the company’s “best March quarter” ever. The company reported strong revenue growth in its iPhone, Services and Wearables businesses. Continue reading to learn the call's five key takeaways.
5 “iPhone X Is Dead” Reports Might Be Wrong
Contrary to numerous market reports, Apple is still maintaining that the iPhone X is still a particularly successful product. Apple CEO Tim Cook personally pushed back against those reports — saying that the iPhone X has been the most successful Apple handset every week since it launched.
Apple reported that customers chose the iPhone X over other models each week in the March quarter. iPhone revenues are also up 14 percent year-over-year. The average selling price for an iPhone is $728, up from $655 a year ago — presumably due to the iPhone X’s $999 price tag.
The company also announced that this is the first product cycle in which the most premium iPhone is also the most popular.
4 Wearables Are Dominating
Apple announced that its Wearables business — comprised of Apple Watch, AirPods and Beats — is now the size of a Fortune 300 company. Across the globe, wearables are continuing to grow.
The company tracked a new March quarter record for the Apple Watch, which is also the best-selling smartwatch in the world. CEO Tim Cook also noted that AirPods’ popularity is continuing to grow and reiterated that was a runaway hit with consumers.
3 Services Are Booming
As expected, Apple noted that its Services business is growing at a good pace across the globe. The company maintained that it’s on track to double its 2016 services revenue by 2020.
The company reported record revenue from the App Store and Apple Care. Apple Music has grown to 40 million subscribers, and Apple Pay is also continuing to expand. Overall, Apple’s paid subscriptions increased by more than 100 million year-over-year — to a current total of 270 million in the March quarter.
2 Apple Is Doing Better in China
Apple seems to have gotten back on track in China. During its earnings call, the Cupertino tech giant reported a 21 percent revenue increase in Greater China throughout the March quarter.
In addition, Apple announced that the iPhone X was the best-selling smartphone in China through Q2 (other Apple iPhones also rounded out the top three best-selling smartphones in the country).
1 Apple’s Goal: Getting More People to Buy iPhones
The Cupertino juggernaut also noted that Apple’s smartphone market share is still rather low compared to the entire handset industry. Apple said its main task now is to convince more people to switch to Apple — and to keep current iPhone customers.
That strategy includes India, a critical market for Apple but one where it holds a low market share. Apple said it is working with carriers to build out LTE networks and infrastructure (along with other strategies the company didn’t cover). Overall, Tim Cook said that he doesn’t believe the smartphone market is “saturated.”
? Figures & Revenue Projections
- All in all, Apple reported $61.1 billion in revenue and $13.8 billion in profit throughout the March quarter.
- Apple said it sold 52.2 million iPhones, 9.1 million iPads, and 4.07 million Macs through Q2 2018.
- As far as the next quarter, the company offered a revenue guidance between $51.5 billion and $53.5 billion.