Apple posts all-time high for Q3 revenues

In the early days of the Covid-19 pandemic, consumer electronics giant Apple was one the first companies of its kind to be severely affected by closures of key device manufacturing sites in the Wuhan region, leading some to question the long-term future of the company. However, Apple’s third-quarter 2021 results have probably put the final nail in the coffin of that notion.

As companies began to ramp up their manufacturing capability, Apple was able to benefit from the Covid-driven delay in the roll-out of the 5G-compatible iPhone 12 range. Launched in October 2020, the 6.1in iPhone 12 and 5.4in iPhone 12 mini devices are said to feature the most 5G bands of any smartphone and offer the broadest 5G coverage worldwide. US models support millimetre wave – the higher-frequency version of 5G – allowing the iPhone 12 to reach speeds up to 4Gbps.

With the new device driving what analyst Omdia called a “blockbuster fourth quarter” of 2020, Apple followed up with what the analyst called “significant year-on-year growth” of 46%, shipping 56.4 million units in the quarter. Omdia added that Apple continued to dominate the premium smartphone market in its second quarter of 2021, ended 27 March, posting revenue records in each of its geographic segments and strong double-digit growth in each of its product categories, driving the installed base of active devices to an all-time high.

Second-quarter revenues were $89.6bn, up 54% year on year. International sales accounted for 67% of total revenue in the quarter. Net income for the quarter was $23.63bn, more than double that of a year ago. Revenues broke down to $72.68bn of product sales and $16.9bn of services. These represented rises of a staggering 61.64% and 26.61% respectively, compared with the same period in 2020, and clearly show the effect of the iPhone 12. Indeed, Apple revealed that in its second quarter, it made $47.94bn in iPhone sales, compared with $28.96bn in the same period a year earlier.

For the three months to 26 June 2021, Apple posted a June quarter record revenue of $81.4bn, up 36% year on year, and quarterly earnings per diluted share of $1.30. Net income for the quarter almost doubled to $21.74bn, while for the first three quarters of the financial year combined, net income was $74.13bn, rising 72.4% year on year.

Product sales for the quarter amounted to $63.95bn, up 37.4% on an annual basis, with a running total for the year to date of $232.31bn, up 36.2% compared with the first nine months of the previous financial year. iPhone sales for the quarter were $39.57bn, up 49.8%, and $153.1bn for the nine months, climbing 37.5% annually. iPad sales in the quarter amounted to $7.37bn, an annual rise of 11.9%, leading to total year-to-date iPad sales of $23.61bn, an annual rise of 39.5%. Services revenues were also on a marked upward trajectory, totalling $17.49bn for the third quarter, up 32.9%, and $50.15bn for the nine-month period, an annual rise of 27.9%.

Commenting on the third-quarter results and assessing the drivers for growth, Apple CEO Tim Cook noted that during the quarter, its teams had built on a period of “unmatched innovation” by sharing “powerful new products” with users at a time when using technology to connect people has never been more important. “We’re continuing to press forward in our work to infuse everything we make with the values that define us,” he added.

“Our record June quarter operating performance included new revenue records in each of our geographic segments, double-digit growth in each of our product categories, and a new all-time high for our installed base of active devices,” added Luca Maestri, Apple’s chief financial officer. “We generated $21bn of operating cash flow, returned nearly $29bn to our shareholders during the quarter, and continued to make significant investments across our business to support our long-term growth plans.”