Apple didn’t just set a new record for the company when it beat every forecast in the Q1 results announced yesterday, it set a new world record for the most profitable quarter of any company in history, says credit ratings giant Standard & Poor’s. Its net profit of $18B far exceeded the previous record of $15.9B, set by oil company ExxonMobil back in 2012.
With such huge numbers difficult to grasp, there have been various attempts around the net to put the numbers into perspective. TechCrunch expressed it as a profit of $8.3M per hour. Reddit user Cal00 noted that Apple made more from the iPhone alone that Google and Microsoft made from their entire product ranges–combined. Business Insider observed that the single-quarter iPhone sales were greater than Yahoo’s entire market capitalisation.
It had been predicted that high sales of the iPhone 6 Plus, together with more people opting for the middle storage tier after Apple doubled capacity to 64GB, would boost margins beyond the 37.5-38.5% forecast by Apple. This was indeed the case, notes the WSJ, averaging selling price rising year-on-year by $50 to $687, enabling Apple to hit a gross margin of 39.9%.
I would point out that only a small fraction of the installed base has upgraded, so there’s a lot more people within the installed base, but I would also point out that we had the highest number of customers new to iPhone last quarter than in any prior launch. And also that the current iPhone lineup experienced the highest Android switcher rate in any of the last three launches in any of the three previous years. We didn’t look back to the other years, I don’t know about those.
The iPhone now accounts for 69% of total Apple revenue.
The record-breaking numbers also explain why, despite the stock buybacks and dividends paid out by Apple, its cash reserves continue to climb, now standing at $178B. As Business Insider commented, this would be more than enough to enable Apple to buy IBM, Ford, GM and Tesla with $41.3B in change.
Via BBC News
FTC: We use income earning auto affiliate links. More.