Apple sees another record holiday fuelled by iPhone demand
SAN FRANCISCO: Apple says it will have another record holiday, fuelled by enduring demand for the iPhone.
The Cupertino, Californiabased company said sales in the quarter ending in December will be US$ 75.5 billion ( RM317 billion) to US$ 77.5 billion, topping last year’s record. Chief Executive Officer Tim Cook attributed the forecast to customers upgrading to the latest iPhone models, converts switching over from Android handsets and continued growth in China.
Apple’s sheer size means growth is tougher to achieve. As iPad tablet sales decline and adoption of Apple Watch remains modest, the company’s expansion has become increasingly dependent on demand for new iPhones. While the results won’t put to rest concerns that Apple’s business may be nearing its peak, it showed the company is still able to wring more from its most important product.
“IPhone dominates the results, but it’s doing good enough to deliver growth for the company,” said Walt Piecyk, an analyst at BTIG. “The concern was growth would be ending.”
Apple shares rose 1.7 per cent to US$ 116.49 at 10.05am last Wednesday in New York. The stock was up 3.8 per cent this year through Tuesday.
Apple included its holiday outlook in results for the fiscal fourth quarter, which ended on Sept 26. For that period, net income rose 31 per cent to US$ 11.1 billion, or US$ 1.96 a share, while sales climbed 22 per cent to US$ 51.5 billion, the company said last Tuesday in a statement. Analysts had predicted earnings of US$ 1.88 a share on sales of US$ 51 billion. The company had US$ 205.7 billion in cash and investments on its balance sheet at the end of the quarter. Gross margin, a measure of profitability, widened to 39.9 per cent.
Apple’s success largely hinges on the iPhone. Defying a broader slowdown in the global smartphone market, the company sold 48 million handsets last quarter, up 22 per cent from a year earlier. The device generated sales of US$ 32.2 billion, making it bigger than Microsoft and Facebook’s quarterly businesses combined. Introduced on Sept 25, the newest models – iPhone 6S and 6S Plus –
iPhone dominates the results, but it’s doing good enough to deliver growth for the company. The concern was growth would be ending. Walt Piecyk, an analyst at BTIG
come with an improved camera, faster processor and new 3D Touch screens.
For the all of fiscal 2015, Apple reported total sales of US$ 233.7 billion. Net income grew 35 per cent to US$ 53.4 billion for the year.
Smartphone sales have helped Apple make up for falling demand for the iPad. Shipments of the tablet fell 20 per cent to 9.88 million units in the recent quarter, the seventh straight decline. Apple didn’t break out unit sales for Apple Watch, but analysts estimated the company sold 3.8 million in the quarter.
Mac purchases rose to 5.71 million, compared with an average projection of 5.6 million.
The company is facing tough comparisons with last year’s holiday quarter, when the longanticipated debut of biggerscreen iPhones led to record sales, said Alex Gauna, an analyst at JMP Securities in San Francisco.
Last year, revenue jumped 30 per cent during the holiday rush.
After reporting sales rose more than 20 per cent for the past four quarters, analysts predict Apple won’t top 10 per cent growth through at least 2017.
“The law of large numbers is working against them as they get bigger,” Gauna said. “It gets harder to show growth.” — WPBloomberg