Apple Hits Another One Out of the Park

Posted on November 1, 2018 by Paul Thurrott in Apple, iOS, Mac and macOS with 25 Comments

Apple posted another record-setting quarter today, with a net income of $14.1 billion on revenues of $62.9 billion for the period ending September 30.

“We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history,” Apple CEO Tim Cook said in a prepared statement. “Over the past two months, we’ve delivered huge advancements for our customers through new versions of iPhone, Apple Watch, iPad and Mac as well as our four operating systems, and we enter the holiday season with our strongest lineup of products and services ever.”

Looking at the product lines for which Apple does provide hard numbers, we see the following.

iPhone. Apple sold 46.9 million iPhones in the quarter, roughly flat with the 46.7 million it sold in the same quarter a year ago. But Apple’s newest iPhones barely registered—the iPhone XS and XS Max were only available in the last week of the quarter and the iPhone XR shipped afterward—so things should improve dramatically in the current quarter.

iPad. Apple sold 9.7 million iPads in the quarter, down 6 percent from the 10.3 million it sold a year earlier. Worse, the iPad’s ASP must have fallen too, since revenues were down 15 percent YOY. Apple did just launch a new iPad Pro, but I don’t expect that to impact its results in a major way going forward.

Mac. Mac sales also fell in the quarter, from 5.4 million units a year ago to just 5.3 million units. That said, Apple just launched new and long-awaited MacBook Air and Mac Mini upgrades, so this quarter might see a boost.

Services. Apple’s services business hit an all-time high of $10 billion in revenues, an increase of 27 percent YOY.

Apple says it generated $19.5 billion in operating cash flow and returned over $23 billion to shareholders in dividends and share repurchases in the September quarter.

Also, I’ll point out that the iPhone is now responsible for 59 percent of Apple’s revenues. But if you add in Services, the entire iPhone ecosystem represents about 68 percent of the company’s revenues. This is a bit lower than in previous quarters, but Apple is still very much the iPhone company.


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