What Next for the Prodigious Apple?


omarjordan

Yesterday, Apple reported the biggest quarterly profits ever made by a public company; it reported net profits of $18billion (around Rs. 111,000 crores) in its fiscal first quarter, beating the previous $15.9billion record set by ExxonMobil in the second quarter of 2012.

Announcing the results for the first quarter of 2015 (October 2014 – December 2014) to financial analysts, Apple CEO Tim Cook said that the ‘demand for iPhone has been staggering, shattering our high expectation, with sales of over 74 million units, driven by the unprecedented popularity of iPhone 6 and iPhone 6 Plus. This volume is hard to comprehend. On average, we sold over 34,000 iPhones every hour, 24 hours a day, every day of the quarter.’ The Apple stock rose more than 7% after the results were announced.

The $74.6 billion in sales and $18 billion in profit that Apple reported yesterday means that its sales grew by 30% and its profits by 38% over the corresponding period last year.  Moreover, iPhone sales doubled in China, Brazil and Singapore despite intense competition from Samsung and Chinese brands.

The amazing performance of the company also raises a few questions:

  • With the introduction of the larger screen iPhones, the sales of iPads are being cannibalised. The sales of iPads fell by 22% in 2014 from a year earlier. Will iPads slowly get squeezed between large screen phones and laptops?
  • Almost two thirds of Apple’s sales are now coming from a single product category – phones. Will this make the company vulnerable in the future? All it needs is one gadget to attack the iPhone 6 and 6 Plus. Already, brands like Xiaomi are emerging as serious competition.
  • Will Apple Watch, scheduled to be launched in April this year, or Apple Pay (Tim Cook said yesterday that ‘2015 will be the year of Apple Pay.’) provide the next big impetus to sales? The jury is out.

I have always been an admirer of Apple and feel that it will continue to surprise us. People constantly keep harping on the fact that Apple has not launched any new products in a while; however, as Apple has shown, you can post record results by just launching new variants of existing products.

Visual courtesy : https://www.flickr.com/photos/omarjordanf/

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This article was written by Joy

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