Apple Sets A New Revenue Record As IPhone Sales Defy Supply Chain Constraints
Apple sets a new revenue record as iPhone sales defy supply chain constraints
After abandoning guidance at the start of the pandemic, Apple had a lot to be happy about as it reported its single-largest quarterly revenue in history. With pandemic uncertainty and supply chain constraints, the hardware behemoth outperformed analysts' expectations, posting an 11 percent increase in sales in the fourth quarter of 2011.
When it came to hardware, things were looking up — with the exception of iPad revenue, which was down 14 percent from the previous year. Following the launch of the iPhone 13 line in late September, the iPhone has seen significant growth in recent months. Smartphone sales reached $71.63 billion, representing a 9 percent increase year on year from $65.6 billion in 2012.
The results are all the more impressive when you consider the constraints on the global supply chain and the scarcity of semiconductor chips. Tim Cook, the company's CEO, stated during an earnings call that the company expects supply chain issues to continue to improve.
Instead, the CEO stated simply, "This quarter's record results were made possible by our most innovative product and service lineup in history." At a time when connectivity is more important than ever before, we are encouraged by the response we have received from customers around the world." Apple's ongoing efforts to achieve carbon neutrality were then discussed by Mr. Cook.
The news confirms what we've been thinking for quite some time. Apple's record-breaking smartphone quarter can be attributed in large part to the company's recent success in China. According to Counterpoint Research, the company topped the market share list for the world's largest smartphone market — no small feat in light of the prevalence and popularity of companies such as vivo, Oppo, Honor, and Xiaomi, which came in second through fifth place, respectively, in the world's most populous smartphone marketplace.
Huawei has struggled even in its home country, where sanctions prevent the company from accessing critical technologies such as those used in nuclear weapons. The announcement marks the company's first quarter of dominance in China in six years, according to the company.
Canalys noted earlier this month that Apple has also risen to the top of the global rankings as a result of supply chain bottlenecks and chip shortages that have plagued other manufacturers around the world. When compared to the previous quarter, when the company struggled to meet demand in certain markets, the current quarter represents a significant increase.
Looking forward
Smaller manufacturers with less negotiating power with suppliers have historically suffered disproportionately as a result of supply chain constraints, which are likely to continue to pose challenges in meeting demand in some markets.
According to previous reports, while iPad revenue fell short of expectations, Mac revenue increased by an impressive 25 percent from the previous year to $10.85 billion, thanks in large part to the introduction of refreshed M1 models, which included the most significant updates to the iMac and MacBook Pro in years. Services increased to $19.52 billion in the quarter, while Wearables, Home, and Accessories, which includes the Apple Watch and Apple AirPods, grew to $14.7 billion.
