Apple's iPhone 6 Mania Drove Apple to Historic Revenues
The news out of Apple's Financial Conference Call was nothing short of amazing today. Apple's iPhone 6 mania most definitely swept the globe without mercy crushing all competitors that challenged them this holiday season. Earlier today we reported that there was a historic milestone for the iPhone: Apple shipped more smartphones in China than Xiaomi, Samsung and Huawei. That news came on the heels of Apple breaking another historic record in Korea by outselling LG and others to take second place on Samsung's own turf. Today, Apple's CEO talked up a storm and our report fills you on a great number of points that he made during Apple's Financial Conference call. Yes, lots and lots of points that you can use to jab your Android friends with this coming weekend. So have fun.
Some of Tim Cook's Key Conference Call Points
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This was a historic Quarter
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Half a Billion Customer Visits to Apple online and Physical Stores in the quarter
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iPhone sales shattered even internal expectations of over 74 million units and is hard to comprehend, stated Cook.
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Apple sold 34,000 iPhones every hour, 24 hours a day, every day of the quarter
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iPhones were sold in over 130 countries around the world
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The App Store and the Mac each set new records for quarterly revenue with Mac units up 14% to 5.5 million units. App Store revenue was up a remarkable 41%
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On November 27, Apple shipped their 1 Billionth iOS device which was an iPhone 6 Plus 64GB
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Revenue would have even been higher if it wasn't for fierce currency volatility
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The company was blown away by the reaction and adoption of Swift, Apple's new programming language, with over 11 million downloads in just the first month
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There are more than 600 developers integrating HealthKit into their apps
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Cook noted that there will be some amazing third party products related to HomeKit that will roll out this year.
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CarPlay will be adopted by 30 automotive brands in 2015
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Apple pay is off to very fast start with over 750 banks and credit unions are signed on to bring Apple Pay to their customers. And after 3 months since its launch , Apple Pay makes up more than 2 out 3 dollars spent on purchases using contactless payment across the three major U.S. card networks.
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With merchants who already use Apple Pay the rates are even higher.
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2015 will be the Year of Apple Pay
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Apple Watch will begin shipping in April
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The IBM Partnership is strong. In December the Alliance delivered the first 10 applications. Another 12 apps will be released this quarter including 3 new industries: Healthcare, Energy and Utilities and Industrial Products. The alliance is on track to have over 100 apps by year end. Over 130 major companies are expected to adopt the MobileFirst system using iDevices this year alone.
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Cook notes that there are more products to roll out later this year, with no hint of whatsoever as to what they may be.
Other Random Notes of Interest from Apple's CFO
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Apple's growth was broad based. Revenue from developed countries accounting for 20% growth while revenues from emerging countries rose a healthy 58%. Greater China segment was particularly impressive with revenue up 70%
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Sales were well ahead of our expectations in a number of areas. The unprecedented demand for the iPhone 6 and 6 Plus and the incredible production ramp allowed us to build and ship several million more iPhones than we expected when Apple provided guidance back in October.
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Macs and Services reached all-time highs.
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Unit sales were up 44% in the U.S. 97% in BRIC Countries (Brazil, Russia, India and China).
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Apple works with 375 Carriers representing over 72% of the mobile market and have 210,000 points of sale for the iPhone across the globe
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5.5 million Macs were sold which was 700,000 units over last year representing 14% growth rate
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Apple has gained PC market share in 34 of the last 35 quarters
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iPads 21.4 million units sold compared to 26 million in the quarter a year ago
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iTunes sales were 2.6 billion in the Q4 2014 quarter compared to 2.4 billion in Q4 2013
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Apple opened 10 new stores this past quarter bringing the total to 447 of which 182 are outside of the U.S.
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Apple will have 40 Apple Stores in China by the end of 2016.
Cook's General Views on the State of the iPad & More
Analysts were interested in knowing the breakdown of numbers between the iPhone 6 and 6 Plus. Yet Tim Cook refused to provide any clarity as to what iPhones sold in which quantities, but noted that certain models sold better in different countries. That would definitely be in context with the iPhone 6 Plus being very popular in countries like Korea and China.
Cook also noted, without being specific, that the Android switcher rate was the highest when compared to the previous three major iPhone upgrades and that the momentum of the iPhone 6 in BRIC countries like Brazil and China remains very bullish. Cook added that their online Apple Store is now reaching 350 cities in China.
Apple's CEO didn't have a set answer as to why iPad sales are slowing down. He rambled off all kinds of data like first-time buyers of iPads in Japan were up 50% and 70% in China. Satisfaction surveys have the iPad at 97%. Usage stats show that the iPad crushes their closest competitors when it comes to using the net. For e-commerce on tablets, over 80% is done on an iPad when compared to other competing tablets. So the iPad sales eroding, in Cooks view, isn't really seen as a problem that they could put their finger on at the moment.
In general, Cook thinks that perhaps the upgrade cycle for the iPad is much longer than it is for iPhones, though he admitted that they don't have the data yet to confirm that perception.
I think that Cook's train of thought is right. Unless some killer feature or app compels us to consider an upgrade, the current iPads are sufficient. That's why the 12 inch iPad Pro that's reportedly due out later this year may hold some potential for bringing fresh new thinking to tablets along with all-new accessories like a digital pen or a Smart Cover with a built-in keyboard.
In the end, Apple blew Wall Street expectations out of the water. Apple was firing on all cylinders and even the iPad outsold competing tablets while only decreasing slightly year-over-year.
Apple's meteoric iPhone 6 sales have taken Apple to historic new highs. Yet the percentage of the company's profits tied to a single product is a little lofty at something like 69%. Then again, the Apple Watch is on the way and hopefully it will be able to round out Apple's revenues a little better over time.
How can it not be said: Congratulations to the Crazy Ones in Cupertino for a mind-blowing quarter that was fun to see unfold.
In September we posted a report titled "Samsung weeps as iPhone 6 Mania Rocks around the Globe." There was just something electric in the air with the arrival of the iPhone 6. And with Apple taking Samsung head on with their first phablet, I just knew it was going to be an exciting war to see unfold.
And so when the numbers rolled in on January 21 that Apple's iPhone 6 smashed a smartphone sales record on Samsung's Home Turf, I knew that Apple's numbers were going to blow us away – and they did. Apple simply crushed Samsung this quarter – and that's always music to our ears.
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