We’re well into the second decade of iPhone sales, and with the covid-19 pandemic devastating economies worldwide, some wondered: Would 2020 be the year that Apple’s runaway revenue train finally slowed down? The answer is decidedly: lol no.
The company reported its holiday quarter earnings today, and it turns out that an absolute shit-ton of people bought a 5G iPhone 12 (specifically a Pro and Pro Max) in Q1 of 2021. But it wasn’t just the iPhone that propelled Apple’s revenue to more than $100 billion for the first time—$111.4 billion, to be exact, which is a 21% increase year-over-year.
“The winter holiday season is always a busy time for us and our products, but this year was unique,” Apple CEO Tim Cook said in the company’s Wednesday earnings call with analysts. “We had a record number of device activations during the last week of the quarter. And as covid-19 kept us apart, we saw the highest volume of FaceTime calls ever this Christmas.”
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Every product category on the company’s balance sheet saw double-digit growth, and the iPhone was actually the least impressive.
The Mac saw a 21% revenue leap driven by demand for the new MacBook Air, MacBook Pro, and Mac Mini, Apple CFO Luca Maestri said on the company’s earnings call. iPad revenue jumped by 41%. Apple lumps its Apple Watch earnings in with home and accessories, a category that saw a 30% increase year-over-year. Maestri said the company’s wearables business is now big enough to be a Fortune 120 company, and 75% of buyers are new to Apple Watch.
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The iPhone, by comparison, grew a paltry 17%—but it’s important to note that Apple released the iPhone 12 and 12 Pro four weeks into the quarter and the 12 Mini and 12 Pro Max seven weeks into the quarter. There are now more than 1 billion iPhone users worldwide, which is…absolutely wild. And that brings us to services.
The company has been investing heavily in services, and it’s seeing returns: almost $16 billion in revenue for the quarter. Maestri said Apple now has 620 million paid subscriptions across its services, which include Apple TV+, Apple Music, and iCloud storage, among others. That’s a 140 million increase year-over-year.
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That’s where the 1 billion iPhone users come in: These are all potential Apple services subscribers. Apple CEO Tim Cook said the holiday quarter saw the most iPhone upgraders—and switchers to iPhone—of any quarter ever. And while it’s not a given that those iPhone owners will subscribe to any Apple service, well, it’s not out of the question, either.
The only downsides to Apple’s business in 2020 were AppleCare and retail sales, which makes sense—it’s tough to take your device in for repair or buy a product in person if stores are closed.
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Apple rarely if ever hints as to what products are in the pipeline, which makes analysts’ jobs a little more challenging. Apple Car? Who knows. Apple Glasses? Shrug. But Cook said the company’s wearables products are still in their early stages, and you know what that means…OK, no, neither do we. But rumors will continue to swirl, Apple will continue to make billions, and it appears the company’s stock price will remain relatively stable and boring (though analysts hate that the company’s execs have stopped providing future guidance due to the pandemic). Fortunately, there are other stocks to watch in wide-eyed disbelief this week.