Apple iPhone sales grew despite coronavirus, but iPhone 5G will launch late

Apple’s iPhone sales showed resistance between April and June, despite the coronavirus The pandemic continued to spread, changing lives and disrupting businesses worldwide. Apple, amid a robust third-quarter fiscal report, noted its success navigating the global health emergency it has its limits, and that means the new iPhone will be arrive later than usual.

The tech giant twice warned investors during a conference call Thursday that a new iPhone is expected, what Apple watchers say probably includes 5G wireless radios Among other things, it will be delayed from its typical September release.

“As you know, last year we started selling iPhones in late September. This year, we project that the supply will be available a few weeks later,” said Apple’s chief financial officer, Luca Maestri.

When asked later by an analyst to clarify, Maestri said a new iPhone would come, we would just have to wait. “A year ago we launched the new iPhone in late September,” he said. “This year, the supply of the new product will be a few weeks later than that.”

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There is a reason for Wall Street obsession with the iPhone. The smartphone is Apple’s most important product, accounting for more than half of its revenue in at least the past six years. The device is also largely responsible for making Apple the giant it is today, with a value of more than $ 1.65 trillion on Wall Street and the production of more than 1.5 billion devices that are actively used worldwide. .

Apple’s latest financial disclosures are just the latest sign of how the coronavirus pandemic has impacted the global economy. In the US, total smartphone sales fell a quarter in the same period, according to Counterpoint Research. Apple gets most of its revenue from the sale of its iPhones, which have seen a slight rebound from a year ago.

Overall, more than 40 million Americans have applied for unemployment, raising questions about whether consumers will have an appetite to buy expensive new devices. United States GDP, a measure of the United States economy, suffered its largest quarterly decline on record, falling 32.9% between April and June.

The United States government has tried to combat these problems with higher unemployment benefits, although that program expired last weekend for approximately 30 million Americans, and more will be affected in the coming months. And even though the stock market is rebounding to record highs, economists fear that will not last unless Congress continues with another round of unemployment stimulus and assistance that it is negotiating.

But an increase in COVID-19 cases in different parts of the U.S., which started in June and continues today with Florida reporting a single-day death record for the third consecutive day, raises questions about Apple’s prospects. in the coming months. Although Apple is hailed as one of the best supply chain companies in the world, and brings together a network of hundreds of suppliers to manufacture its devices primarily in China, Apple watchers fear that COVID-19 will be further affected. while preparing for the holidays. shopping season

“We have taken an approach in which we know we are trying to understand how the virus evolves over time,” Maestri said.

Investors appeared unaffected by the delay, sending Apple shares more than 5% in after-hours trading, after closing more than 1% at $ 384.76 per share. Apple’s shares have increased more than 28% so far this year.

Showing the numbers

Despite the relative difficulties of the iPhone, Apple said its other product categories fared well.

During the three months of its fiscal third quarter, which ended June 27, Apple said it posted iPad sales of $ 6.6 billion, up 31% from the same period last year. Mac computer sales were nearly $ 7.1 billion, up from 21% last year. Apple CEO Tim Cook noted that these categories benefited from the environment, with people locked up in their homes who are probably looking for devices for work or entertainment.

The company’s wearables and services businesses, which, while smaller than the iPhone business, are a key part of Apple’s future, both posted double-digit growth. The wearables segment, which includes Apple Watch and AirPods, posted sales of $ 6.5 billion. Its services, including subscription services like Apple Music and Apple TV Plus, recorded $ 13.2 billion in revenue.

Even the iPhone, whose slowdown in production in China led Apple to warn investors about the coronavirus in February, recorded $ 26.4 billion in sales, more than 1% compared to the same period of the previous year. That time included closing orders worldwide and the temporary closure of Apple’s retail stores. The minor bump is also better than last year, when Apple recorded a nearly 12% drop in iPhone sales during the spring months before its iPhone 11 was revealed.

Overall, Apple said it made a profit of $ 11.3 billion, 12% more than the same year ago. That translates to $ 2.58 a share in earnings, with $ 59.7 billion in total revenue, which was 11% higher than last year. That was also much higher than analysts had expected the company to report, which averaged $ 2.04 a share in earnings with $ 52.3 billion in revenue, according to surveys released by Yahoo Finance.

“In uncertain times, this performance is a testament to the important role our products play in the lives of our customers and to Apple’s relentless innovation,” Cook said in a statement. He noted that Apple recorded growth in each of its international markets, including China, where sales increased 1% despite being the epicenter of the initial coronavirus outbreak.

While Cook indicated that his company has some control over the coronavirus, he cautioned that the company is likely to have difficulty meeting demand for iPad and Mac during the important back to school shopping season. Analysts believe that uncertainty about whether schools will reopen may fuel new technology purchases by families, despite the economic crisis, putting even more pressure on Apple to deliver devices.

“We have a fantastic line of products,” said Maestri. “And we know that these products are incredibly relevant, especially given the current circumstances.”

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