iPhone ramped up in Q3 2021 with record results. Late yesterday and with the markets closed, Apple once again announced record financial results. The third fiscal quarter of 2021 has yielded gross revenues of $81.434 billion and net income of $21.744 billion. In this quarter, which is traditionally the weakest of the year, Apple has broken its record within these three months.
The company has also largely broken investors’ expectations, with the iPhone being the main protagonist of this period.
Record revenues and profits with an iPhone on a rampage
Apple generated almost as much revenue in this quarter as in the best quarter of two fiscal years ago. In Q1 2019 it earned $84.31 billion versus $81.434 billion in the current one.
The contrast is stark, as we are comparing the best period of the year, where Christmas coincides with a new iPhone, with the “worst” performing quarter, which is the quarter immediately preceding a new iPhone generation.
Revenues are up 36.4% year-over-year, while profits are up 93.2% to $21.744 billion, nearly doubling those of the previous year. Individually, Apple’s segment growth was as follows:
- iPhone: 49.8%.
- Wearables, Home and Accessories growth: 36%.
- Services: 32.9%.
- Mac: 16.3%.
- iPad: 11.9%.
Tim Cook remarked that 5G is still in its infancy, as it has only just begun to be deployed worldwide. In addition, the strong growth of the iPhone has been driven by renewals among existing users and the addition of new users from Android (the so-called switchers).
The split between revenue from the iPhone and the rest of the company is again balanced, slightly against the handset. In recent years, Apple has managed to reduce dependence on the iPhone by offering a more robust and attractive set of products and services. But the iPhone still reigns over all of them individually.
The company has indicated that they expect strong demand for the iPhone in September. Without saying so directly, they expect to launch the next-generation iPhone 13 (or whatever it will eventually be called) that same month, so we’re back to the usual pre-coronavirus pandemic schedule.
If we look at the growth being experienced by the iPhone and other segments, we see how the last quarters are particularly high. It is striking that these growths are occurring during a global shortage of chips since the end of 2020. Tim Cook has assured that they are only seeing some tension in the manufacture of previous-generation chips.
All indications are that Jeff Williams and the entire operations team have been able to solve or at least mitigate the worst effects of this silicon shortage. The real litmus test will come this September and beyond, as the next generation iPhone is expected to be in high demand.