Apple has seen growth, the likes of which we have never seen before during the coronavirus pandemic, achieving a market cap of $2 trillion earlier this year. Thus, it’s no surprise that the company reported massive growth during the 3rd quarter of the year(Apple likes to call it the 4th quarter for some reason), reporting $64.7 billion in revenue. This makes this quarter the most profitable September quarter the company has ever had, which, in the midst of a pandemic and delayed iPhone launch, is quite surprising.
Let us first get the numbers aside. Out of the total $64.7 billion, products made up for the bigger chunk, bringing in $50.1 billion during the quarter, while services saw a massive jump, accounting for $14.6 billion, up from $12.5 billion during the same time last year. In fact, this growth in revenues from the services is what caused this quarterly growth, as compared to last year’s $51.5 billion, revenue from products has declined.
And that is where the hurting began, dragging Apple stock down enough to shave off nearly $100 billion in market cap.
Apple’s Q4 results traditionally see massive bumps in revenue numbers, thanks to new iPhones that usually launch in September. But 2020 hasn’t been a usual year, and it didn’t spare even the most valuable company on earth. A delayed iPhone launch, that happened in Oct this year, meant that Apple couldn’t cash in on the sale bump that it usually gets. As a result, revenue numbers, though up, went significantly down for hardware related figures.
That being said, iPhones still made up for the bulk of Apple’s revenue, bringing in $26.4 billion during the quarter.
The company reported steady growth in the wearable market reporting $7.9 billion in revenue (up from $6.5 billion last year) thanks to the new Series 6 and Apple SE watches, which were launched in mid September. Mac and iPad saw similar growth, making up for $9 billion and $6.8 billion of the total $64.7 billion respectively.
Services is where the company shone, thanks to its efforts for diversifying its revenue streams. Services accounted for a massive $14.6 billion during the quarter, compared to last year’s $12.5 billion. The company is well on its way to achieve the goal of 600 million paying subscribers, and with the Apple One bundle ready to launch, Apple seems optimistic.
Quarterly earnings per diluted shares stood at $0.73, while the net income stood at $12.7 billion.
Now, with a late iPhone launch, new Apple Watches and iPads already in the pipeline, and a services bundle ready to launch, the last quarter of the year (or as Apple would call it, the first of 2021) has the potential to be the company’s biggest till date.