Apple announces "phenomenal" quarterly earnings boosted by iPhone sales
Apple sold a record 74.4m iPhones in the three months to the end of 2014, beating analysts’ expectations as sales of its two newest models soared during the Christmas holidays and found new fans in China. The tech company reported a record $74.6bn in revenues for the all-important third quarter, overcoming the $67.5bn expected by analysts, and a record quarterly net profit of $18bn.
Apple, the world’s most valuable company, ended the quarter with $178bn in cash. Sales were led by China, up 70% on a year ago. Sales in the Americas and Europe were up 23% and 20% respectively.
Apple chief executive Tim Cook called the sales “phenomenal” and said the company had sold 34,000 iPhones an hour every day of the quarter. “This volume is hard to comprehend,” Cook said.
The iPad’s popularity continued to decline, though.
Apple sold 21.4m of the devices in the last quarter of 2014, less than analysts had expected, but iPhone sales cheered investors. Ahead of Apple’s announcement analysts had predicted the company would report sales of iPhone 6 and iPhone 6 Plus of between 66m and 70m over the quarter. Apple’s shares jumped 5% in after-hours trading.
“We’d like to thank our customers for an incredible quarter, which saw demand for Apple products soar to an all-time high,” said Cook. “Our revenue grew 30% over last year to $74.6bn, and the execution by our teams to achieve these results was simply phenomenal.” Last week the firm reported Cook’s salary more than doubled last year, to $9.22m.
2014 was a record-setting year for Apple, with its share price hitting new highs.
The performance beat Apple’s previous quarterly record for iPhone sales, 51m, set in the quarter ending 28 December 2013.
Apple’s latest iPhones were introduced in September and have proved a hit with consumers. The company had eschewed making iPhones with larger screens until last year, and the decision to take on rival Samsung and others with a larger smartphone appears to have paid off.
The introduction of the larger iPhone 6 Plus alongside the iPhone 6 and lower-priced iPhone 5S and 5C pushed Apple’s iPhone sales past 20m a month for the first time in November, according to recent research from Counter Point. Japan, Korea and China have proven bright spots for Apple with higher-than-expected demand for the iPhone 6 and iPhone 6 Plus models.
The giant also increased the amount of money it charges for iPhones over the quarter. The average selling price of the iPhone was $687 in the final quarter of 2014, compared with $637 for the same period a year ago. The iPhone 6 Plus costs $100 more than Apple’s previous high-end model.
In the UK, the number of iPad users touched 15.7m in 2014, up from 12.9m in 2013, eMarketer estimates, but Apple lost market share, falling to 53% of tablet owners from 57% in 2013.
In the US, iPhone owners accounted for 42.3% of all smartphone users in 2014, according to eMarketer, up from 40% in 2013. By comparison, Android users accounted for 51.3% in 2014, up from 50.5% the previous year. There were 76.2m iPad users in the US in 2014, or 51.8% of all US tablet users, according to eMarketer. That market share was down from 54.5% of all US tablet users in 2013.
Apple is preparing to launch the Apple Watch, its first truly new product line under Cook, who took over following the death of co-founder Steve Jobs in 2011. The smartwatch is expected to go on sale in April. Cook said his expectations for the watch were “very high”.
The product launch comes as Apple is struggling to sell iPads in the face of cheaper alternatives, winding down sales of its iPod media players and increasingly concentrating on services like Apple Pay, its credit card-less payment system that can be used with iPhones and the new watch.
Cook said that some 750 banks and credit unions had now signed on for Apple Pay and that the service already comprises more than two-thirds of all contactless payments. He said Whole Foods had reported a 400% rise in contactless payments thanks to Apple Pay.
