Can bright financial report make apple feel at ease

Maybe the colorful products played a role, Apple’s revenue hit a new high this season. The doubling of net profit, far exceeding market expectations, also makes Apple full of confidence in the future. But in the face of reduced consumer demand, the supply crisis caused by the lack of core and the anti-monopoly storm in various countries, the real risks Apple will face may still be in the future.


“Rolling” expectation

In the early morning of April 29, Beijing time, Apple released its second quarter results of fiscal year 2021. According to the report, Apple’s net revenue in the second quarter was US $89.584 billion, an increase of 54% over the same period last year; Net profit was $23.63 billion and diluted earnings per share was $1.4, up 110% from the same period last year.

Apple’s results this quarter far exceeded market expectations. Analysts generally expected Apple’s revenue to be $77.36 billion and diluted earnings per share to be 99 cents. Apple shares rose 2.3% after hours on Wednesday, with a market value of $2.24 trillion.

It is worth noting that in the second quarter, Apple’s revenue of each product achieved double-digit growth, but the most important one is still mobile phone products. According to the financial report, the revenue from iPhone products reached US $49.738 billion, accounting for 55.6% of the total revenue. In addition, the sales of computers and tablets were also very gratifying, with an increase of 70.1% and nearly 79% respectively.

There are also traces behind the substantial growth“ The comparison quarter of this fiscal quarter is the same period last year, when the global regions were isolated one after another, so part of the growth came from this comparison. ” Apple CEO Tim Cook said.

Specifically, such a brilliant performance may be attributed to the Greater China region. According to the financial report, Apple’s revenue in Greater China in the second quarter was 17.73 billion US dollars, accounting for 20% of the total revenue; The year-on-year growth rate was 87.4%, much higher than the overall growth rate.

Cook said frankly, “we have attracted some new customers in China, which is really important to us.”. He also said Apple is very satisfied with its performance in China and is particularly satisfied with the response of Chinese consumers to the iPhone 12 series.

At the same time, there is something unsatisfactory. The revenue share of Apple’s high expectation service business decreased from 22.9% to 19.9%. However, this may not mean that the performance of the service business itself is poor, but that the growth rate of the hardware business has greatly exceeded the service revenue.

Full of confidence

After the financial report was released, Apple’s management held a conference call. Cook said that there was a double-digit growth in both new iPhone users and new iPhone users, and the number of new iPhone users set a record in the second fiscal quarter over the years.

Yang world, an Internet analyst, believes that Apple’s performance growth in this quarter is mainly due to two reasons: first, the improvement of global purchasing power, and second, the good performance of the newly launched iPhone 12 series last year.

Cook also said the iPhone 12 was the most popular product among consumers, and sales of the iPhone 12 pro and iPhone 12 Pro Max were also strong.

But for specific mobile phone sales, apple stopped publishing two years ago. However, according to strategy analytics, a market research firm, Apple’s global sales increased 44% in the first quarter to 57 million units, accounting for 17%, ranking second in the world.

And for the next quarter, apple is confident. Luca mestery, Apple’s CFO, said revenue in the second quarter would maintain “strong double-digit year-on-year growth.”.

At the same time, apple sees 5g as a huge market. Cook said that the 5g mobile phone business is still in its early stage, and the penetration rate of 5g network is relatively low worldwide. The future 5g mobile phone market has a very good prospect, and the outbreak period of 5g market is far from coming“ So there is still a lot of room for Apple’s 5g mobile phone to grow, and the sales of iPhone 12 and iPhone in the future are guaranteed. “

However, apple did not release its quarterly outlook this time, because since the outbreak, Apple has stopped publishing the content on the grounds of uncertainty. A reporter from Beijing business daily contacted Apple about its future plans and performance, but no reply has been received so far.

How many risks are there

Now full of confidence, does not mean that Apple’s future performance without risk.

Some people expect that consumers’ demand for Apple products will decrease in the future. Rod hall, an analyst at Goldman Sachs, said that as the world reopens, the current high demand for iPads and Macs is unlikely to continue, so the surge in revenue in these areas may not be enough to further drive up share prices.

But in Apple’s view, demand is not a problem, the difficult thing is the supply side. Cook said the company does not expect demand for the products to be problematic, mainly because of concerns about insufficient supply. The shortage of chips may affect the supply of iPad and MAC product lines.

Luca Mestre confirmed that Apple has seen the impact of the chip shortage, with revenue falling by about $3 billion to $4 billion in the third quarter of 2021 due to the supply constraints of iPad and MAC.

At the same time, it has been revealed recently that Apple plans to cut the production of airpods headphones this year, from 110 million previously expected to 75 million to 85 million, and the production capacity will be cut by 25% – 30%.

In addition to Apple itself, another factor that may impact Apple’s performance is antitrust accusations from various countries. The European Union is expected to formally file antitrust charges against apple this week, which mainly involve Apple’s use of its platform position to limit its competitors’ market position.

The accusation could lead to a fine of up to 10% of Apple’s global revenue and challenge its platform based business model.

At the same time, in the United States, antitrust authorities are also investigating whether Apple has used its dominant market position to restrict competitors and charged excessive commissions. At a hearing held last week by the US Senate antitrust panel, spotify and dating giant match questioned the monopoly status of apple and Google platforms.

In Yang’s view, the trend of anti-monopoly in various countries is indeed intensifying. But as for Apple itself, it’s not just a company’s problem. Every Internet giant has this accusation, and the government’s punishment has little effect on this side of the consumer side.

Yang Shijie further pointed out that the most important thing Apple needs to pay attention to is its own products and technology. The global market competition will become more and more fierce. Apple has already “fallen off the altar”. How to retain its loyal “fruit powder” is a problem for apple.

It is worth noting that some people have taken action against Apple’s monopoly. On April 27, the Russian antitrust organization, the Federal Bureau of investigation, announced a penalty for apple. Apple will be fined more than 900 million rubles (US $12 million) for violating the anti-monopoly law, abusing its dominant position in the IOS application market and restricting competitors from developing parental control functions, the announcement said.

Beijing Business Daily reporter Tao Feng Zhao Tianshu

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