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iPhone 12 sales bolster Apple’s revenue growth

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The iPhone 12 Pro and iPhone 12 Pro Max.
The iPhone 12 Pro and iPhone 12 Pro Max.

The iPhone 12 helped Apple to beat Wall Street expectations, with its latest financial results revealing it breached the $100 billion revenue mark for the first time in any quarter.

In its financial results for its fiscal 2021 first quarter ended 26 December 2020, Apple posted record revenue of $111.4 billion, up 21% year-over-year, and quarterly earnings per diluted share of $1.68, up 35%.

International sales accounted for 64% of the quarter’s revenue, with sales of its phones, wearables and services “setting new revenue records”, according to the company.

“Our December quarter business performance was fuelled by double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices,” says Apple CFO Luca Maestri.

“These results helped us generate record operating cash flow of $38.8 billion. We also returned over $30 billion to shareholders during the quarter as we maintain our target of reaching a net cash-neutral position over time.”

During the quarter, Apple introduced several new products, including four new 5G-enabled iPhone 12 models; the iPad Air, the new M1 MacBook and Mac Mini; and the Apple One subscription service, which bundles together Apple Music, the iCloud storage service, Apple TV Plus, Apple Arcade, Apple News Plus, and the newly-introduced Apple Fitness Plus.

iPhone 12 declared “a hit”

Apple, the biggest US-listed public company by market capitalisation, with a value of $2.4 trillion, has weathered the COVID-19 storm, despite being forced to temporarily close down all its stores outside China at the beginning of 2020.

While Apple unveiled it 5G-enabled iPhone 12 range several months after its competitors introduced their new 5G models, a newly released report by research firm Canalys found the company took the global smartphone top spot, as customer demand for the iPhone 12 surged in Q4 2020.

The report notes that in Q4 2020, worldwide smartphone shipments reached 359.6 million units, a small decline of 2% year-on-year. Apple shipped its most iPhones, to date, in a single quarter, at 81.8 million units, up 4% against the previous year, notes Canalys.

Samsung took second place, shipping 62 million units – a 12% decline. Xiaomi, Oppo and Vivo completed the top five, with each seeing share gains from a beleaguered Huawei (including Honor). Xiaomi grew 31% to 43.4 million units and Oppo grew 15% to 34.7 million units, while Vivo shipped 32.1 million units for 14% growth, according to the report.

“The iPhone 12 is a hit. Apple is better positioned than its competitors on 5G, being heavily skewed towards developed markets, and mobile operator sales channels,” says Canalys analyst Vincent Thielke.

“But it also made savvy moves behind the scenes to propel its sales and profitability. The omission of a power plug from the iPhone retail box, which reduces weight and size, is making logistics significantly more efficient, amid the ongoing high cost of air freight due to the pandemic. And it also implemented channel-centric growth initiatives to target small and medium business customers, which have bolstered demand for its entire range of iPhones.”

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