Despite the pandemic bringing smartphone sales to a grinding halt for at least a couple of months in many countries, Apple has managed to record quarterly revenue of $59.7 billion, an increase of 11 per cent from the year-ago quarter. According to research firm Canalys, Apple was the only company that managed to grow in Q2, shipping 45.1 million iPhones globally, a growth of 25 per cent compared to the previous year, even as the overall smartphone market plummeted 14 per cent.
Even as International sales accounted for 60 per cent of its Q3 revenue, CEO Tim Cook said the “record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments”. He said this growth in uncertain times was a “testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation”. “This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”
Apple CFO Luca Maestri said as a result of the “record business results” the company’s active installed base of devices had also reached an all-time high in all of our geographic segments.
Apple is attributing a lot of its growth to the launch of the more affordable iPhone SE. In the earnings call, Cook said the company “saw better than expected demand in May and June” which he attributed to “increase in demand to several interactive causes, including a strong iPhone SE launch,” and continued economic stimulus and lifting of the pandemic lockdown.
Also, the iPhone SE gave Apple a new phone for what would otherwise be a relatively silent quarter for the company with no new phone launches. Cook said with early data on the iPhone SE shows a higher switcher number than before, which is good for Apple as it was seeing customers hold on to phones for longer. “It also seemed to appeal to some people that were holding onto the device a little longer because they wanted a smaller form factor phone,” he said, adding that this combination of small form factor and affordable price has “made the iPhone SE very popular”. Cook said that while the iPhone 11 is still the most popular smartphone, the iPhone SE definitely helped the results.
Canalys analyst Vincent Thielke said Apple defied expectations in Q2 with the iPhone SE accounting for around 28 per cent of its global volume, while iPhone 11 remained a strong best-seller at nearly 40 per cent. “iPhone SE will remain crucial to prop up volume this year, amid delays to Apple’s next flagship release,” he said. Also, according to Thielke, Apple had blockbuster results in China, growing 35 per cent to reach 7.7 million units. “It is unusual for Apple’s Q2 shipments to increase sequentially. As well as the new iPhone SE, Apple is also demonstrating skills in new user acquisition. It adapted quickly to the pandemic, doubling down on the digital customer experience as stay-at-home measures drive more customers to online channels,” he explained.
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