Not surprisingly, Apple's fiscal first quarter of fiscal 2022 (that is, the fourth quarter of 2021) reported a new high.
The fourth quarter of each year is apple's product sales season, and it is also Apple's most profitable quarter, and its average revenue in the past four quarters has exceeded 100 billion US dollars. Analysts have previously pointed out that if Apple can exceed $118.2 billion this time, it will be the highest record for Apple's quarterly revenue.
According to the fourth quarter financial report, Apple's revenue in the quarter was $123.945 billion, far exceeding market expectations, and also exceeding $111.439 billion in the same period last year, setting a quarterly record; net profit was $34.630 billion, an increase of 20% compared with $28.755 billion in the same period last year. According to this calculation, Apple earns nearly $1.4 billion a day and earns about $380 million per day.
Specifically, Apple's fourth-quarter Americas revenue was $51.496 billion, up from $46.310 billion in the same period last year; Revenue in Europe was $29.749 billion, up from $27.306 billion in the same period last year; Revenue in Japan was $7.107 billion, down from $8.285 billion in the same period last year; and Revenue in the rest of Asia Pacific was $9.810 billion, up from $8.225 billion in the same period last year.
Among them, Apple's revenue in Greater China was $25.783 billion, up from $21.313 billion in the same period last year, and it became the region with the largest increase in a year-on-year growth rate of 21%.
Broken down into various product lines, Apple achieved year-on-year revenue growth in all product categories except the iPad, of which iPhone revenue was $71.628 billion, an increase of 9% year-on-year; Mac revenue was $10.852 billion, an increase of 25% year-on-year; iPad revenue was $7.248 billion, down 14% year-on-year; other product revenue was $14.701 billion, up 13% year-on-year; and service revenue was $19.516 billion, up 24% year-on-year.
On the earnings call, Apple CFO Luca Mestre said that "very serious supply constraints" have led to a shortage of iPads, and supply chain problems are mainly due to chip shortages in older models.
Apple CEO Tim Cook reassured investors that the company's supply chain challenges were improving and was expected to be reflected in the latest quarterly earnings report in March.
The bottleneck of the supply chain and the shortage of chips are precisely the problems that the market is highly concerned about. It should be known that Tesla, which released the fourth quarter financial report of Apple one day in the morning, although it handed over a beautiful result of new highs in revenue and net profit, due to tesla management's early warning that supply chain bottlenecks would adversely affect the business, its stock price plunged by more than 11% the next day.
However, Apple is fortunate to be better than Tesla, in addition to the iPhone and other hardware, the rapid growth of the software service industry, which is the company's second growth curve, is offsetting some of the risks caused by hardware shortages.
To date, Apple has accumulated more than 745 million paid subscribers. Investment bank Wedbush even offered a $1.5 trillion growth valuation for Apple's services business.
Since 2018, Apple has changed from hard to soft under the leadership of Cook, vigorously developed software service revenue, tried to build it into a new growth curve outside the iPhone, and announced that it will not announce specific sales of iPhones in the future.
This strategic move helped Apple cross the trillion-dollar threshold and continue to break through the $2 trillion mark, and even pushed Apple to three trillion dollars in early January, but now Apple's stock price has retreated by more than 11%, and the total market value remains at about $2.6 trillion. How to get back and sit firmly on three trillion dollars, Apple is obviously not enough to rely on hardware and software services such as the current iPhone.
A
Greater China has once again become one of the core of apple's revenue contribution. In the fourth quarter, Apple's revenue from Greater China was $25.783 billion, accounting for 21%, making it the largest increase among all regions.
According to the China mobile phone market report released by the research agency Counterpoint, in the fourth quarter of 2021, Apple surpassed vivo and ranked first with a market share of 23%. This is Apple's second quarterly sales championship in the Chinese market after six years since the peak of the iPhone 6 in 2015.
In the whole of 2021, Apple returned to the top three of China's mobile phone market, and its market share increased from 11% in the same period last year to 16%, becoming the largest annual mobile phone manufacturer. Huawei, which ranked first last year, slipped from 31% of its market share to 10% and fell to sixth, becoming the manufacturer with the largest decline in sales.
Zhang Mengmeng, research analyst at Counterpoint, said: "Apple's outstanding performance is driven by its pricing strategy and the hybrid obtained from Huawei's premium base. After the iPhone 13 was released in September last year, Apple rose to the top spot in the Chinese market. After that, for most of the fourth quarter, it remained in the lead. ”
The iPhone 13 is a credit. Cook said, "The market demand for the entire iPhone 13 product line is very large, and the best-selling models in many markets are occupied by our products, such as the top five in the US and Australian markets, and the top four in the Chinese urban market." ”
Compared with the previous generation of products, the iPhone 13 began to pursue a "no increase in price" strategy. Taking the iPhone 13/13 mini as an example, its minimum storage capacity has been upgraded from 64GB to 128GB, but the price is 800 yuan cheaper than the iPhone 12 with the same specifications.
In the face of Huawei's vacated market share, domestic mobile phone manufacturers who want to share a piece of the pie have squeezed their heads to impact the high-end, and "increasing the amount without increasing the price" is one of the means for Apple to compete for the Huawei cake, not to mention that this means can also play a role in suppressing the domestic mobile phone manufacturers' plan to impact the high-end.
Although iPhone sales are good, it should not be ignored that the overall mobile phone market is in a significant decline. Counterpoint data shows that China's smartphone sales fell 9% year-on-year in the fourth quarter and fell 2% year-on-year for the full year of 2021.
Since the global smartphone sales reached a historical peak in 2017, the market ended its high growth state, with the compound annual growth rate falling from double digits to single digits and soon entering a negative growth cycle.
Finding a new growth curve has become a new problem facing all mobile phone manufacturers. Cook found a second growth curve for Software Services for Apple, and also led Apple's market value to a new height of $2 trillion.
Outside investor optimism about Apple's future growth potential has propelled Apple's market capitalization up 53 percent in the past year. But in the eyes of some analysts, Apple is already in a growth dilemma.
Goldman Sachs analyst Rod Hall gave Apple a "neutral" rating in a research report, and although Apple is expected to release a good fourth-quarter earnings report, he believes that the growth prospects of the iPhone and services business are worrying. As Seeking Alpha contributor Paul Franke points out, for a company like Apple that continues to work hard to reinvent itself, updates to iPhones, iPads and services won't push it into the future.
To get back and sit on the new threshold of three trillion DOLLARs, Apple also needs to find a new growth pivot.
B
In an interview with the media in December last year, Cook revealed three areas that Apple is focusing on, saying: "We are very focused on augmented reality (AR), we are very focused on artificial intelligence, we are very focused on autonomous driving. ”
However, in the face of analysts' questions about meta-universes and other related questions on the earnings call, Cook did not respond positively to the AR hardware problem. As is Apple's convention, the company rejects all discussions until a new product is officially released.
However, Cook also confirmed on the earnings call that Apple is indeed interested in developing related technologies, sees "great potential" in this area, and is making "corresponding investments."
In March 2020, the Apple AR glasses that have been rumored to be exposed are expected to be released in 2022. At the time, supply chain sources said their optics manufacturers were already working with Apple.
With the meta-universe concept on fire, Apple AR glasses received special attention last year. Li Nan, former senior vice president of Meizu, also broke the news on Weibo on January 23 that Apple is developing a double 8K glasses.
According to a report released by Apple's well-known analyst Guo Mingxi in January, Apple AR glasses may be postponed to the end of 2022, and the official shipment will wait until the first quarter of 2023, according to Guo Mingxi, Apple's new devices will be equipped with dual CPUs produced by 4nm and 5nm process processes, and the computing power will be about 2-3 years ahead of competitor products.
Dan lves, an analyst at investment bank Wedbush, believes that AR glasses associated with the metacosmic concept are expected to raise Apple's stock price by $20 per share, and if successful, this may be a new point to support Apple to sit firmly at $3 trillion.
Apple Cars is another growth curve that has been pinned on by the outside world for greater hopes. Morgan Stanley analyst Katie Huberty has released a report that there is an overall effective market of $500 billion per year for smartphones, and Apple has about a third of this market. While the global auto and mobile market is worth about $10 trillion, "Apple only needs to account for 2% of the market share, which is equivalent to the size of its iPhone business." ”
Based on the habitual tradition of Apple products in terms of "catching up later", the outside world was once very optimistic about Apple's car. After the news of Apple's car manufacturing was exposed at the end of December 2020, Tesla's market value evaporated by $42.7 billion on the same day. But in the seven years since Apple swayed to build the whole car or do the system swing, Tesla has grown into the world's most valuable car company, with a market value of more than $1 trillion.
In order to assemble its own car shell as soon as possible, Apple has been running around in the past year, seeking cooperation with vehicle companies:
In January 2021, South Korean media IT News reported that Apple contacted Hyundai Group and intended to produce self-driving electric vehicles in Georgia, planning to reach an annual output of 100,000 vehicles in 2024, with a planned final annual production capacity of 400,000 vehicles, and the cooperation was eventually stranded;
In October 2021, Apple once again negotiated with BYD and CATL on the supply of power batteries. Because the latter two did not agree to build a battery factory in the United States and formed a cooperative development team for Apple, they eventually rejected cooperation with Apple.
In December 2021, Korean media OUTLETNews reported that Apple visited South Korea again to discuss the supply of electric vehicle batteries with LG and SK.
Given the current deadlock in negotiations with partners, Kuo predicted in the report that Apple cars may not be launched until 2028 or later.
C
Apples, which have been slow to expand into new markets, are tasting the bitter fruit of falling one step behind.
The first to bear the brunt is the brain drain. On January 23, Bloomberg reporter Mark Gullman reported that Joe Bass, head of software engineering project management for Apple's automotive team, had left Apple to join Meta (formerly Facebook) as director of VR (virtual reality) technology project management.
With The departure of Bass, Apple's newly formed auto management team is almost extinct, and the executives are leaving. Earlier, Apple Automotive Program Director Doug Field jumped ship to traditional car company Ford.
Gurman said bluntly that 2022 will be a key year that will determine the success or failure of Apple's car project. If Apple also plans to launch fully autonomous vehicles in 2025, they need to act as soon as possible, such as making fewer mistakes and reducing employee turnover.
While Apple is hesitating for car-making projects, domestic mobile phone manufacturers as old rivals have also entered the game, regarding cars as the company's new growth point: Huawei has established a car BU and built a car circle alliance; Xiaomi Automobile announced mass production in 2024, and OPPO has also been exposed to related car-making plans.
Recently, Apple's brain drain has also burned into the VR/AR field. According to Bloomberg, Meta poached about 100 engineers from Apple in the second half of last year. In order to retain key employees, Apple even had to pay huge bonuses in the form of stocks to some engineers in chip design, hardware, and some software and operations.
On the second growth curve that has been constructed, Apple is also beginning to encounter challenges. In January, the Consumer and Markets Authority (ACM), the Netherlands' top competition regulator, announced that it had fined Apple 5 million euros (about $5.65 million) for failing to make changes to apple's App Store as required. Earlier, Apple said it would comply with ACM's executive order to allow Dutch dating app developers to bypass Apple and offer users third-party payment methods.
The Korea Communications Commission (KCC) also issued a notice to Apple before ACM, passing the newly revised Telecommunications Business Law, which explicitly prohibits major app store operators such as Google and Apple from forcing developers to use their payment systems. The European Union, India, Australia and others are also considering regulating Google and Apple Pay.
The United States, where Apple's home base is located, is also asking Apple to allow sideloading, allowing users to install apps without going through Apple's App Store to avoid the "Apple tax" fence. On January 21, Senator Ted Cruz, Republican of Texas, said that in order to prevent the behavior from happening, Cook called the relevant lawmakers directly, arguing that the new bill may prevent Apple from implementing privacy and security features, thereby preventing it from improving its products.
The "walled garden" that Apple has built through the App Store is seeing more and more cracks in possibility.
The mobile phone business, which accounts for about 58% of revenue, is also facing challenges from the Android camp. As a representative of technological innovation, the folding screen mobile phone is now evolving into a high-end battle with Apple that domestic mobile phone manufacturers have started in advance. After Huawei, Xiaomi, Honor, OPPO, etc. have been mass-produced and released, Apple's first folding screen broke the news that it will be released as soon as 2023.
From the perspective of boosting stock prices, Apple has to expand into new products and new markets a little faster.