Apple is driving demand for the 5G iPhone to previous sales, profit targets; Warns of lack of chips


Apple on Wednesday announced sales and profits ahead of Wall Street expectations the 5G iPhone upgrades generated, but warned of a global chip shortage that could cut sales of iPads and Macs by several billion dollars.

Fiscal sales to China nearly doubled in the second quarter, and results exceeded analyst targets in all categories, leading to $ 6.5 billion (roughly SEK 48,270) more iPhone sales forecast and Mac sales about a third higher than estimated.

Apple also announced a $ 90 billion (roughly SEK 688,300) share repurchase, the day after Alphabet promised to buy back $ 50 billion (approximately SEK 371,230) in stock.

Apple CEO Tim Cook said in an investor call that Apple will avoid a chip shortage in fiscal policy in the second quarter by burning delivery buffers.

In the third quarter, the shortfall could cost the company $ 3 billion (about SEK 22,270) to $ 4 billion (about SEK 29,700) in revenue, said CFO Luca Maestri.

The shortcomings “primarily affect the iPad and Mac,” Cook said. “We have some challenges,” Cook said, adding later that there may be problems sourcing semiconductors made with older chip technology. These are chips using older technology in the same class that cover Ford Motor, which on Wednesday said the shortage halved production during the second quarter.

Cook said Apple is competing with other industries for chipping capacity at these older plants and is “very, very difficult” to predict when the shortage will end, he said.

The maestri said he expects revenue for the quarter ending in June to grow at “strong double-digit numbers” year on year, but the decline in revenue will be steeper than normal between the second and third quarters of fiscal policy due to a later period. iPhone 12 bring to the markets.

Apple had flourished during the coronavirus pandemic as home-bound consumers stocked electronic devices and signed up for paid apps and services for fitness and music services, and sales grew even more when Apple released 5G iPhone models last fall.

For the second quarter ended March 27, Apple said sales and earnings were $ 89.6 billion (roughly $ 655,230) and $ 1.40 (roughly $ 100) per share, compared to estimates of $ 77.4 billion (roughly $ 574,650). kronor) and 99 cents (approximately Rs 70) per share, according to Refinitiv.

iPhone devices were the biggest driver of growth, suggesting consumers are upgrading to 5G, said Haris Anwar, a senior analyst at

“Stimulus reviews and the successful introduction of the vaccine will certainly help increase consumer demand for technology devices everywhere,” Anwar said.

While Apple’s business is booming, its App Store, one of its fastest growing companies, has come under increased competition due to Apple ‘s in – app payment rules and app review policies.

In addition, Facebook warned on Wednesday that its growth later this year could slow “significantly” as Apple ‘s new privacy policies make it harder to target ads.

In the second quarter of the fiscal year, Mac models and iPads – two product groups rarely relied on for growth in supply on Wall Street – both benefited from consumers working from home and distance learning. In addition to these trends, Cook said Apple customers are reacting strongly to the company’s M1 chip, which is its first Mac’s own processor.

“Both things that happened at once really charged Mac sales. The last three quarters on the Mac have been the strongest three quarters ever in Mac history,” Cook told Reuters.

Apple raised the dividend by 7 percent to 22 cents (about Rs. 15) per share.

Apple said iPhone sales were $ 47.9 billion (about SEK 355,510), compared to analysts’ estimates of $ 41.4 billion (about SEK 307,270), according to FactSet.

Sales of Macs and iPads were $ 9.1 billion (roughly 67530 crores) and $ 7.8 billion (approximately 57880 crores), respectively, compared to FactSet estimates of $ 6.8 billion (approximately 50460 crores) and 5 , $ 6 billion (approximately Rs 41,550 crores).

Apple investors are looking for growth in Apple ‘s supply business, which includes products such as AirPodit headphones and its new ones AirTag tracking devices and its service business, which includes its App Store and new offerings such as paid podcasts. Segment sales were $ 7.8 billion (roughly 5,7850 crores) and $ 16.9 billion (approximately 12,530 crores), respectively, compared to estimates of $ 7.4 billion (approximately 54,890 crores) and $ 15.5 billion (roughly 1, 14,970 crores). ).

According to Cook, the company’s platform has 660 million paying subscribers, up from 620 million in the first quarter.

Apple’s sales in China’s largest region during the fiscal second quarter, which included the busy Lunar New Year, increased 87.5 percent to $ 17.7 billion (approximately SEK 1,31270), compared to 57 percent growth in the previous quarter. .

Apple shares have risen about 93 percent over the past year, compared to a 61 percent rise in the Nasdaq 100 index, to which Apple belongs.

© Thomson Reuters 2021

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