Yesterday, Apple released the results for its 2017 fiscal second quarter (which ran from January 1, 2017 to April 1, 2017) and held a call with analysts to discuss the results. Apple always sees a big decrease in revenue from its first to its second fiscal quarter because Q2 comes right after the holiday quarter. This time last year, Apple has a particularly unfortunate Q2, with Apple bringing in less money than the previous year's Q2. In 2017, Apple's second quarter was just fine, but compared to a year ago, "just fine" seems pretty darn good. This was a solid quarter. Apple's revenue was $52.9 billion, up from $50.6 billion last year. If you want to get all of the nitty gritty details, you can download the audio from the announcement conference call from iTunes, or you can read a transcript of the call prepared by Seeking Alpha, or a transcript prepared by Mikah Sargent of iMore. Apple's official press release is here. As always, I'm not as interested in the financial details as I am the statements of Apple executives during the call that are of interest to iPhone and iPad users. Here are the items that stood out to me:
iPhone
- During the past quarter, Apple sold 50.763 million iPhones. That's down slightly from the 51.193 million iPhones that Apple sold a year ago and also down from the 61.2 million iPhones that Apple sold two years ago in its record-breaking 2015 second quarter. But Apple CEO Tim Cook said that the sales last quarter were consistent with Apple's own expectations, and Apple actually saw more revenue from iPhones ($33.25 billion) than a year ago.
- Cook also noted that he believes that the large number of rumors regarding what Apple has planned for the next version of the iPhone are causing many potential purchasers to wait before buying a new iPhone.
- By my count, as of April 1, 2017, Apple has sold over 1.162 billion iPhones since they first went on sale in 2007.
- Apple cited a survey finding a 96% customer satisfaction rating for the iPhone 7, 98% for the iPhone 7 Plus, and 95% for corporate iPhone buyers.
iPad
- Apple sold 8.922 million iPads. While that number is down somewhat from the 10.3 million iPads Apple sold this time last year, it is notable that the last time that Apple sold less than 9 million iPads in a quarter was way back in 2011 Q2, when the iPad was less than a year old.
- Even so, Cook insisted that "iPad results were ahead of our expectations," said that "we believe we gained share during the March quarter in a number of major markets, including the U.S., Japan, and Australia," and noted that "iPad remains the world's most popular tablet."
- To help you to see iPad sales over time, I prepared a chart that shows two things. The blue line shows the actual iPad sales each quarter (in millions). The green bars show the average of the current quarter and the prior three quarters. I think that this chart is useful because while the blue line shows peaks every year in Apple's fiscal first quarter — the holiday quarter, when folks buy lots of iPads as presents — the green bars are more helpful for seeing iPad sales over time. As this chart shows, the iPad was introduced in 2010 and saw a sharp rise in sales until the end of calendar year 2013 (the beginning of Apple's fiscal year 2014). But from calendar year 2014 through today, iPad sales have decreased over time. I think about this because I really love my iPad and I cannot imagine practicing law without it. I want Apple to remain committed to the iPad, and the decrease in iPad sales over time makes me concerned that Apple will see less reason to invest in the future of the iPad. Fortunately, I believe that Apple CEO Tim Cook himself is a big fan of the iPad, and hopefully this will encourage future growth.
- Apple doesn't comment on future products, so of course didn't say anything in today's call about the future of the iPad. The rumors are that Apple has some great new hardware designs for future iPads, such as an iPad with a very small bezel so that the usable screen size increases while the overall size of the iPad decreases. And the rumors are that Apple has some great new software planned for the iPad, especially for professional users such as attorneys. I sincerely hope that these rumors are true so that us iPad users can do even more with the devices. And hopefully this results in an increase in sales to change the trend shown in the above chart, further encouraging Apple to devote resources to the iPad's future. We'll see.
Other
- Cook noted that Apple is seeing an impressive number of people using the Messages app. During the Super Bowl this year, at one point folks were sending 380,000 messages in the Messages app per second, more than double from the previous year.
- To be fair, though, Apple should share credit for that with the Atlanta Falcons. (Sorry, but as a lifelong Saints fan, I can't resist that joke.)
- Apple doesn't release specific numbers for Apple Watch sales, but did say that sales were almost double of what they were last year.
- When asked about other smartwatch manufacturers pulling back from the market, Cook said: "I think in terms of competition falling out and so forth, the watch area is really hard. It in essence from an engineering point of view is similar to a phone in terms of the intricacies and so forth. And so I'm not very surprised that some people are falling out of it. But we're very committed to it and believe that, it's already a big business, and believe over time it will be even larger."
- Apple doesn't release specific numbers for its AirPods wireless earphones, but Apple did note that one survey saw customer satisfaction at 98%, and said that demand for AirPods continues to exceed supply. You don't really need Tim Cook to tell you that; just ask anyone who is still having difficulty finding a pair of AirPods to purchase.
- Apple noted that its new Apple Store in Dubai is a "truly international store" with employees who speak 45 languages.