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Apple CEO Tim Cook reveals the new iPhone 12.
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Apple reported earnings on Thursday and investors did not like the results. Shares of Apple fell as much as 5% in extended trading even as the company beat Wall Street expectations in both earnings and revenue.
The drop was likely due to iPhone revenue of $ 26.4 billion, down 20% from the same quarter last year.
Apple’s sales in China also suffered, mainly due to weak iPhone sales, Apple said. China’s revenue fell to $ 7.95 billion from $ 11.13 billion a year earlier, a decrease of 29%.
But the iPhone sales situation is not as bad as it seems. This year, Apple’s new iPhones went on sale about a month later than before, as Apple telegraphed over the summer.
So the weakness of the iPhone may be partly because people were waiting for the new iPhone 12, which didn’t go on sale until October. In fact, both Apple CEO Tim Cook and CFO Luca Maestri said customer demand for iPhone was strong and grew until mid-September, when Apple typically launches new iPhones.
“This is a very impressive level of performance when you consider that this year we did not launch or ship any new iPhone models during the quarter,” Apple CFO Luca Maestri said of Apple’s fiscal fourth quarter, which ended in September. .
Apple presented several supporting points Thursday:
Demand was higher than last year during the first part of the quarter. Until mid-September, when Apple held a launch event with new Apple watches but not new iPhones, demand for iPhone 11 models “grew in double digits and exceeded our expectations,” Maestri said.
Cook went into more detail: “If you look at the iPhone and you look at it in two parts, one before mid-September, which is the point at which the previous year we would have launched the iPhone, that time period which is most In the quarter, the iPhone was growing from a customer demand standpoint, and of course the fact that no new iPhones were shipped during the last two weeks of September makes that figure overall negative, “Cook said. .
Expected growth in the holiday quarter. Apple expects iPhone revenue to increase in the December quarter, despite the fact that new iPhone 12 models were released 4 weeks into the quarter and two new iPhone models have yet to go on sale. Last year, Apple reported $ 55.96 billion in iPhone sales in the period.
China also expected to grow. “Greater China is a region that was hit the hardest by the absence of new iPhones during the September quarter. Still, we exceeded our internal expectations in the region and demand from iPhone customers grew through mid-September.” Cook said.
Cook then said that he expects China’s revenue to grow in the December quarter.
“A larger percentage of China’s revenue is made up of new iPhones. And that’s why the total quarter number started with a minus sign. But given what we see at the beginning with the new iPhones, we’re sure that it will grow in the first quarter, “Cook told CNBC’s Josh Lipton in an interview.
Supply limitations. Apple says it has “supply restrictions” on iPhones, meaning they sell faster than Apple can make them.
