Apple overcomes iPhone slump; record sales in India

CUPERTINO (U.S.), Sept. 12, 2017 (Xinhua) -- Photo taken on Sept. 12, 2017 shows the Steve Jobs Theater where a special event of Apple is held in Cupertino, California, the United States. Apple Inc. released a series of new products and services in Cupertino on Tuesday. (Xinhua/IANS)

Apple is still running a well-oiled moneymaking machine despite cooling demand for its hottest product, the iPhone.

Sales and revenue in the July-September quarter exceeded analyst estimates as Apple’s newest iPhones got off to a better start than expected, even though the devices aren’t that much different from last year’s models.

Apple said Wednesday that revenue rose 2% from the same time last year to $64 billion, even as iPhone revenue dropped 9%. The company’s iPhone sales have now declined from the previous year for four straight quarters. Apple’s profit dipped 3% to $13.7 billion, but the earnings per share of $3.03 topped analyst projections.

In another encouraging sign, Apple’s sales in China continued to recover from a sharp drop-off earlier this year. That helped ease worries that Apple might be bruised by President Donald Trump’s trade war with the world’s most populous country.

Apple also signalled its confidence that the momentum will continue in the current quarter, which spans the crucial holiday season. The Cupertino, California, company projects revenue will climb by about 4% from the same time last year.

Part of that growth will likely come from a hotly anticipated video streaming service called Apple TV Plus. It’s scheduled to debut Friday to compete against industry pioneer Netflix and a slew of new entrants, including Disney Plus and HBO Max.

“You can tell from the guidance we are bullish,” Apple CEO Tim Cook told analysts during a Wednesday conference call.

Add it all up, and it becomes easier to see why the stock market’s sentiments about Apple have changed dramatically since the company warned earlier this year that iPhone sales were falling, especially in China. That flop coming out of last year’s holiday season made it clear that the iPhone was losing some of its lustre, raising fears that Apple might have its best days behind.

Those worries hammered Apple’s stock, driving down the price to $142 in early January.

But the stock has been setting new highs this month as investors began to realize Cook had crafted an effective strategy to counteract the waning demand for iPhones. The stock’s recovery translates to a nearly $500 billion swing in fortune for Apple’s shareholders as the company’s market value has soared back to $1.1 trillion _ roughly the same level as its long-time rival, Microsoft.

Apple shares increased $3.24 to $246.50 in Wednesday’s extended trading after the company revealed its fiscal fourth-quarter financial report.

Apple’s recent success has been driven largely by strong growth in its services division, which primarily feeds off the roughly 1.4 billion iPhones, iPads and iPod Touches already in use. The division already is prospering from app store commissions, device repairs, digital payments and Apple’s music-streaming service.

Services generated $46 billion in revenue during Apple’s just-ended fiscal year, accounting for 18% of the company’s revenue. Just three years ago, services accounted for 11% of Apple’s revenue.

And now it appears poised to reel in even more revenue from video streaming.

Apple is selling its streaming service for just $5 per month, less than half the price of Netflix’s most popular plan. It’s also giving it away for a year to anyone who buys an iPhone, iPad or Mac computer in attempt to quickly amass tens of millions of subscribers. The service will start off with a handful of TV series, including one starring Jennifer Aniston and Reese Witherspoon, but Apple is promising to spend billions of dollars on other shows and movies as part of its effort to catch up with Netflix, which boasts 158 million subscribers.

Apple registered a new record in India in its fiscal Q4 quarter and the company generated an all-time revenue record for the Mac desktops in the country, it has announced.

The July-September period saw Apple log record revenue in the country and is set to break the numbers in its fiscal 2020 Q1 (October-December period) as iPhone 11 series has witnessed stupendous response from the Indian buyers.

“Despite the tough compare, we generated an all-time revenue record for Mac in the US and in India and a fourth quarter revenue record in Japan,” Luca Maestri, Senior Vice President and Chief Financial Officer, told analysts over the earnings call late Wednesday.

“More than half of the customers purchasing Macs during the quarter were new to Mac, and the active installed base of Macs again reached a new all-time high,” he added.

“At a country level, we established new Q4 records in many major developed and emerging markets, including India,” he added.

India is back on Apple’s growth trajectory after some dull quarters in the past.

In a big impetus for its India manufacturing dream, Apple has started production of its highly successful iPhone XR at its supplier Foxconn’s facility in Sriperumbudur, Chennai.

Apple iPhone shipments grew 19 percent (YoY) in India in its last reported quarter.

Apple in August said it looks forward to welcoming customers at its first branded retail store in India soon.

Reiterating that India is an important market for Apple, CEO Tim Cook recently said the current iPhone manufacturing will see maximum growth in the days to come amid the renewed push to open its branded retail stores in the country.

During the earnings call on Wednesday, Cook said: “The ECG app now available in 32 markets including India has become a widely celebrated illustration of Apple’s commitment to your health giving users the ability to document and monitor the functioning of their heart and provide critical data to their doctors.

For Cook, India has been a very important market in the long-term.