Highlights from Apple's Financial Conference Call along with Flash Points from Reuters, Bloomberg & The Wall Street Journal
As we noted in an earlier report, Apple delivered higher-than-expected quarterly revenue and profit, boosted by iPhone sales, and issued an outlook that Wall Street interpreted as a sign of solid demand for its latest iPhone 6s and 6s Plus models. Every ear was waiting for Apple's guidance as we noted in a report posted yesterday and Apple's CFO Luca Maestri delivered positive news.
Apple's sales in China nearly doubled to $12.52 billion, accounting for nearly a quarter of its total revenue. In an interview with Reuters, Chief Financial Officer Luca Maestri said Apple was seeing no signs of a slowdown in that market, despite some economic turmoil."We continue to have wonderful success there," adding that Apple now has 25 stores in the country and is opening a new one roughly every month.
Bloomberg reported late today that the iPhone generated sales of $32.2 billion, making it bigger than Microsoft Corp. and Facebook Inc.'s quarterly businesses combined.
Bloomberg noted that Apple's iPad sales were down 20%, but Microsoft's Surface sales were down over 23% –- so it's a category hit, not just an iPad hit.
Apple's CFO told Bloomberg that "When you look at the type of revenue growth we had throughout 2015, it's difficult to repeat those types of numbers, but given our size we feel very good about our prospects for the future."
The Wall Street Journal noted that "More than any other product, the iPhone is the linchpin to Apple's earnings. It accounted for nearly 63% of revenue in the quarter and a greater portion of Apple's profits. Any slowdown to iPhone demand is a major concern for investors."
This is why Apple emphasized the iPhone's ongoing strength. For instance, sales to Great China, which includes Hong Kong and Taiwan, rose 99% to $12.5 Billion.
Other Key Flash Card Points
Revenue growth greater than actual revenues of 90% of Fortune 500 companies, Tim Cook says.
Apple set all-time record of 5.7 million Mac sales. Tim Cook says defies the negative trend in personal computer market
- 40 million people using Apple News, Cook says, and service is beginning to expand overseas.
Tim Cook on growth: iPhone will grow this quarter thanks to high rate of people switching from Android and upgrading. Late in the Q&A Cook briefly pointed to Android switchers hit an all-time high by clocking in at 30% of iPhone sales. That's a staggering number and one that will have Android fans turning purple. I guess once the training wheels come off, consumers want a real smartphone (ha!).
Cook says China isn't the only market Apple is focusing on — he was also impressed with progress in Vietnam, Indonesia and India. Of course India is the big question mark with rumors pointing to Foxconn setting up multiple plants in India with at least one reserved for manufacturing the iPhone. India's Prime Minister met with Apple's CEO last month in San Jose to discuss business. Will the iPhone 7 be made in India in 2016 for the Indian market?
On Apple Pay: Apple partnering with American Express to bring Apple Pay to eligible AmEx users in Australia and Canada by this year. It will expand in Spain and Hong Kong next year.