The Year Of The Apple TV?

Tim Cook, Apple
Tim Cook, Apple

Apple revolutionized personal technology with the introduction of the Macintosh in 1984 and today leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Although Apple reported a record quarterly revenue of USD 75.9 billion, the fact that this number was below the expectations of analysts from Wall Street was slightly worrisome. Despite this lower-than-expectation figure, Apple recorded an impressive Q1 2016 earnings with USD 29.3 billion in revenue in the America, USD 17.9 billiion in Europe, USD 18.3 billion in China, USD 4.8 billion in Japan and USD 5.4 billion in rest of the Asia Pacific.

“Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV. The growth of our Services business accelerated during the quarter to produce record results, and our installed base recently crossed a major milestone of one billion active devices,” said Tim Cook, CEO, Apple.

The company recorded quarterly net income of USD 18.4 billion as compared to USD 18 billion in the year-ago quarter. International sales accounted for 66 percent of this revenue.

“Our record sales and strong margins drove all-time records for net income and EPS in spite of a very difficult macroeconomic environment. We generated operating cash flow of $27.5 billion during the quarter, and returned over USD 9 billion to investors through share repurchases and dividends. We have now completed USD 153 billion of our USD 200 billion capital return program,” said Luca Maestri, CFO, Apple.

#1. Apple iPhones work harder to keep up the sales expectations: An impressive 74.8 million iPhones were sold in Q1 2016. Since this quarter coincides with the holiday season, and is usually the best quarter for apple, it only makes sense to compare the number with Q1 2015. An increase of 0.3 million more devices shipped hinted at a small 0.4 percent growth rate year-on-year (YoY). This was the first quarter that the new generation iPhone 6s and 6s Plus had been available to the public. The total revenue from iPhone alone in the quarter was USD 51.6 billion. However, despite the initial craze, it seems that sales numbers have not kept up.

#2. Apple iPad Pro making its mark strong: Apple’s new iPad Pro outsold Microsoft’s long-established Surface tablet line last quarter, according to a new report. IDC Research says Apple sold just over 2 million of its mega-sized tablets, which were unveiled in September and began shipping in early November, whereas Microsoft sold 1.6 million Surface devices, including both the Surface Pro and the Surface 3. The report also said that Amazon was one of the few tablet makers to see growth during the last quarter, largely due to its USD 50 Fire. The company shipped a total of 5.2 million devices. The revenue from iPad in the quarter was 7.1 billion.

With that said, the overall tablet market had an unstable year. Compared to last year this same quarter, Apple’s iPad sales revenue is down 21 percent while its unit sales are down 25 percent. However, when compared to the quarter before this, Apple’s iPad sales revenue is up by 66 percent with unit sales is up by 63 percent.

#3. Mac still going strong: The Mac is still selling extremely well, but appears to have been stalling out a bit as far as growth within Apple goes. The Mac’s sales revenue is down 3 percent while unit sales are down 4 percent year-over-year. The Mac’s sales revenue is down 2 percent with unit sales down 7 percent compared to last quarter.

#4. Powerpacked Apple TV: When the new Apple TV was unveiled last September, it represented an enormous leap for the company’s digital media player set-top box. While the box itself looked almost the same, it packed more powerful internals and a game-changing remote that brought Siri to the Apple TV. It also made navigation faster by introducing a touch pad as the primary means of moving around the OS.

Apple does not report individual sales figures for its various products that are bundled under the “other” product category. These products include Apple TV STBs, Beats headphones, iPods, and Apple watches. And without giving specific sales numbers, Apple CEO Tim Cook said that the 2016 Q1 was the “best quarter by far for Apple TV sales,” noting that there were already over 3,600 third-party Apple TV apps available.

#5. Apple Watch leading the market: According to the latest smartwatch related statistics released by the retail data firm Strategy Analytics, Apple Watch led the smartwatch sales, which is then followed by Samsung. The figures shared by Strategy Analytics revealed that the tech giant sold nearly 5.1 million units of its Apple smartwatch in the October-December period thereby grabbing a market-leading 63 percent share of the worldwide market.

In spite of this, Apple stock has tumbled in the repercussion of Apple’s guidance for Q2 2016. Apple has released a predicted revenue that is almost a 10 percent YoY decrease in comparison to Q2 2015.

Apple’s innovation was clearly at display this quarter, with it outcompeting its competitors in various fields. Despite not meeting the analysts’ expectations, Apple had another profitable quarter.

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