Apple survived the supply chain crisis, with record revenue in a single quarter and acknowledging that it has invested in the meta universe

Highlights:

Apple's revenue in the first fiscal quarter hit a record high, and its net profit exceeded market expectations;

With the exception of the iPad, revenue from all product lines exceeded Wall Street expectations;

More than 1.8 billion devices have been activated, and Apple has 785 million subscribers worldwide;

The supply chain crisis has improved, acknowledging that a metacosm has been invested.

Tencent Technology News On January 28, Apple on Thursday announced a new record quarterly revenue, exceeding Wall Street expectations, indicating that the world's most valuable company can survive the supply chain crisis caused by the epidemic and chip shortages.

According to the business division, except for the iPad, Apple's revenue in all product categories exceeded Wall Street expectations, and the total revenue hit a record high of $123.9 billion, an increase of 11% year-on-year. The following are apple's key performance for the first fiscal quarter of fiscal 2022 ended December 25, 2021:

Earnings per share: $2.10, up 25% year-over-year and beating Wall Street's expectation of $1.89.

Revenue: $123.9 billion, up 11% year-over-year, beating Wall Street's expectation of $118.66 billion.

iPhone revenue: $71.63 billion, up 9 percent year-over-year, beating Wall Street's expectation of $68.34 billion.

Services revenue: $19.52 billion, up 24% year-over-year, beating Wall Street's expectation of $18.61 billion.

Other product revenue: $14.70 billion, up 13 percent year-over-year, beating Wall Street's expectation of $14.59 billion.

· Mac revenue: $10.85 billion, up 25% year-over-year and beating Wall Street's expectation of $9.52 billion.

iPad revenue: $7.25 billion, down 14 percent year-over-year, less than Wall Street's expectation of $8.18 billion.

Gross margin: 43.8%, beating Wall Street's expectation of 41.7%.

Like the past few fiscal quarters, Apple still did not provide a fiscal second quarter performance outlook for the end of March in its latest earnings report. Apple has not provided guidance since the covid-19 pandemic was released, citing uncertainty.

Interpretation of financial reports

Apple's surprisingly strong financial data suggests that concerns about supply chain constraints are overblown. Apple CEO Tim Cook warned late last year that shortages could cost the company more than $6 billion in revenue during the crucial holiday shopping season. But Apple's latest quarterly earnings report shows the tech giant has weathered the crisis and benefited from new products including the iPhone 13, Apple Watch Series 7 and the new Mac.

Apple's performance — and the market's reaction — is being closely watched by investors. Amazon on Tuesday reported strong earnings and sales results, exceeding analysts' expectations. But the company's stock is still penalized. Amazon shares initially fell more than 5 percent in after-hours trading that night and then rose more than 2 percent on optimistic forecasts. The dramatic shift underscores investor concerns that the tech giant's growth potential and valuations will reach new heights after a two-year rally.

After the recent plunge in U.S. stocks hit tech stocks hard, investors are expecting Apple to reassure them. Over the past month, fears of slowing sales and impending interest rate hikes have reduced the attractiveness of the tech industry, and Apple itself has been affected. After the company's market capitalization exceeded $3 trillion in early January, Apple's stock price fell with the overall market, and the current market value has fallen to about $2.6 trillion.

Apple's flagship product, the iPhone's fiscal first quarter revenue reached $71.63 billion, up 9% year-over-year and beating Wall Street's expectation of $68.34 billion. Cook spoke highly of the iPhone's sales performance in the first fiscal quarter. He said: "This is a result achieved in the face of tight supply. "The fiscal first quarter was also the first full quarter of iPhone 13 sales. The phone went on sale in September, a few weeks before the 2020 iPhone 12. Although the iPhone 13 is considered a modest update, users who want to upgrade to 5G services still complain about the device.

Bernstein analyst Toni Sacconaghi pointed out in a research report before the earnings report: "By the end of the first fiscal quarter, supply and demand were basically balanced, and shipments in the Chinese market were strong. "Tight supply has affected the iPhone 13 series and other new products, including the latest Mac and Apple Watch products, causing shipments to be delayed by several weeks.

Against this backdrop, Apple's first-quarter data has given investors a sigh of relief. But not everything is rosy, as iPad sales are lower than expected. The company has previously said that supply issues have hit the iPad particularly hard. iPad revenue for the fiscal first quarter was $7.25 billion, less than Wall Street's expectation of $8.18 billion. Apple has previously launched the new iPad Mini and made a minor update to its cheapest tablet, but it has struggled to provide enough supply to the market.

Apple Services generated $19.52 billion in revenue in the first quarter, beating Wall Street's $18.61 billion forecast. The category grew 24% year-over-year due to strong App Store, Apple Music and iCloud subscription sales. Apple said earlier this month that developers generated about $60 billion in revenue from the app store throughout 2021, but did not provide data on the company's app store share.

Apple's Wearables, Home and Accessories division generated $14.7 billion in revenue in the fiscal first quarter, up 13 percent year-over-year and beating Wall Street's $14.59 billion forecast. The division's products cover apple watches, Apple TVs, AirPods, Beats headphones, and other products. Revenue growth in this category was boosted by Apple's launch of new AirPods headphones at the end of 2021. However, the Apple Watch Series 7 still experienced release delays and severe shortages.

Apple's Q1 Revenue for the Mac reached $10.85 billion, up 25 percent year-over-year and beating Wall Street's expectation of $9.52 billion. Apple released a new MacBook Pro in its fiscal first quarter, which was well received by consumers and reviewers alike.

More than 1.8 billion activated devices

Apple has reached its highest install base ever, with more than 1.8 billion active devices used by customers worldwide, up 9% from 1.65 billion in the same period last year. Cook said the total number of Apple devices installed has exceeded 1.8 billion. This was helped by the increased demand for Apple products during the pandemic. The number of Apple devices in use continues to increase. The change in active devices in 2019-2020 was 100 million, and the growth volume in 2020-2021 was 150 million units, and the total increased by another 150 million units in the following year.

In addition, the number of global subscribers to Apple's services also increased by 165 million to a total of 785 million. Luca Maestri, Apple's chief financial officer, said: "We have set quarterly records in every geographic region. Then, as I mentioned before, set a record for iCloud, music, video, advertising, and payment services. So we did. This is better than expected at the beginning of the quarter. ”

Crisis improvement

In an interview with the media on Thursday, Cook mentioned a forward-looking data point. He said: "Our expectation for the second fiscal quarter is a steady year-on-year increase in revenue. We expect supply tightness in the second fiscal quarter to be lower than in the first fiscal quarter. ”

Cook noted that Apple's supply problems are improving. He said the first fiscal quarter was worse than the previous fiscal quarter in terms of supply challenges, but he expected the issue to improve in the second fiscal quarter. "Our biggest problem is chip supply, which is the supply of chips on legacy nodes. We're doing a good job at the cutting edge. "The cutting-edge chip is a powerful processor at the heart of the phone, while the "traditional node" chip is another, less complex part, running functions such as driving a display or managing power. But Cook is also wary of when the industry's chronic supply problems will disappear. "We didn't predict that," he said. "You have to know a lot of things to make accurate predictions, like what other people's needs are, what kind of supply we can squeeze out."

Cook said Apple is facing inflationary pressures. "I think everyone sees inflationary pressures. That's the way it is. ”

Invest in metaversity

Cook mentioned the potential of the metacosm in Thursday's earnings call. He said Apple sees a lot of potential in the metacosm. He linked Metacosmity to the company's current augmented reality/virtual reality efforts, adding that Apple is investing in the space.

Market rumors suggest that Apple will play an important role in the future of virtual reality , the metacosm. On Apple's earnings call, Cook confirmed that the company is interested in the development and has made an investment. Specifically, when asked about metaversals, Cook said, "We're a company in an innovative business. There are over 14,000 augmented reality apps in our app store." But when asked about augmented reality/virtual reality or other projects in the field, that response is Cook's usual response. (Compiled by Tencent Technology/No Taboo)