Apple records biggest quarter in the history of the world: here is how it looks in charts


Apple recently posted another record quarter, but as we get used to the company posting record Holiday quarters, one might lose a bit of a context.

To put things better in perspective, we look at the performance of Apple as a company throughout the years, the continually growing importance of the iPhone and we ponder whether Apple is now the one-trick pony many claim it has become. All of this, we can understand with charts and we've got a lot of them right below.

Before we dive in, let's make one thing clear: the past quarter, Q1 2017 in Apple's fiscal year, or the last calendar quarter for 2016, was not only Apple's strongest Holiday quarter ever, it was also the best quarter of any company ever. Apple scored a $78.29 billion in revenue, topping its previous $74.78 billion best in fiscal Q1 2016 and the third-best $74.47 billion in Q1 2015.

At the same time, this was not Apple's most profitable quarter: while revenue was at a record high, the actual net profit of $17.89 billion was below the record $18.36 billion in the same quarter last year, and even behind the $18 billion in Q1 2015. Let's see what caused this.

iPhone



It was not the iPhone. The Apple iPhone sold more than analysts expected at a whopping 78.3 million units in just one quarter. What's most notable is that the most popular iPhone this quarter was the new iPhone 7, proving wrong so many analysts who speculated that users bought more of the older iPhone 6s. Apple chief executive Tim Cook admitted that the company could only reach demand-to-supply balance in January 2017, so there is definitely no slow down in demand for the new iPhone. The iPhone 7 Plus was also obviously supply-constrained.


Unsurprisingly, this drove the highest ever revenue from iPhone. Apple scored $54.38 billion in iPhone revenue in this quarter, beating even the bullish expectations from analysts.


iPad



But then there was the iPad. The iPad is still a hugely successful business by any common measure. At 13 million units sold, it obviously outsells traditional computers from any individual company, but it's also painfully clear that the iPad is in decline and that decline has been steady and going on for years. In fact, the iPad peaked way back in Q1 2013 and Q1 2014. It's interesting to look at that peak because it coincides with the launch of the iPad Air, which was by many accounts the largest significant upgrade to the iPad line-up. One could argue that customers don't see much point in upgrading over the iPad Air currently, and that Apple will need to provide something truly innovative to get people excited about the iPad again. Rumors are that a new 10.5-inch iPad is coming this Spring, though, so the wait should not be long.


Along with a decline in sales units, comes a dip in revenues from iPad. Still, Apple made $5.5 billion on the iPad in a single quarter, clearly ranking the iPad alone the size of a Fortune 100 company and a success by any financial measure. Yet still, it is clear that in comparative terms the slow-down in iPad sales was one contributing factor why Apple's net profit for this quarter could not exceed profits in the past two years.

Revenue and Net Profit



And here are the total Apple revenue and net profit plotted over time. You can clearly see the funny up-tick pattern with every Holiday quarter when Apple sales are surging up. One number that you don't see here, but that is implicit is the gross margin. It amounts to 38.5% for this quarter, down from 40.1% in the same quarter last year. This has a lot to do with the mix of products that Apple is selling, but we will understand it better when we look at the average selling prices further on.


Next up, you can see how many units of its three major categories has Apple sold throughout this quarter. Regretfully, Apple does not post sales numbers for its Apple Watch, but we do know that the Watch has just had its best quarter, and analysts project that sales of the wearable grew over 5 million units.

Services



In the beginning of the article, we said that many point out that in recent years Apple has become a one-trick pony, the iPhone company. That's a fair observation, but it's also true that Apple under Tim Cook is growing one other category strongly and that growth was particularly evident this quarter. It is the Services category including revenues from the App Store, Apple Pay and iCloud. In Q1 2017 it reached a record $7.2 billion of revenue, and it's now a bigger business than the iPad and will likely soon overtake the Mac. Apple aims to double revenue from services in just four years, according to Tim Cook.

Average Selling Price



One thing that analysts got hilariously wrong was the average selling price (ASP) of the iPhone this quarter. While Bloomberg projected iPhone ASP falling down, it actually grew to a record $695, obviously thanks to strong interest in the pricier iPhone 7 Plus and higher storage tiers of the regular iPhone.


You can also see that the iPhone has been on a slow, but steady upwards curve when it comes to average selling price, while the opposite has happened with the iPad. This is an interesting trend that once again proves the popularity of older models like the iPad Air 2 and a lower share of the iPad Pro in Apple's tablet mix. That's not a surprise given the somewhat niche creative target audience of the Pro iPad, but it's still one thing to note.

Apple, an iPhone company



Finally, you can see the current reality of Apple that is still predominantly an iPhone company. The iPhone share in revenues stays relatively consistent with some other categories rising, while others decline.


The iPhone was 69% of Apple's whole business this quarter, and you can see that Services and Mac were tied for the second place, while iPad fell back to fourth and others make up 5% of Apple's total revenue.

Conclusion


In conclusion, it's important to understand just how big of a company Apple is. It just posted the biggest revenue of any company in the history of the world (not counting the acquisition-merger driven results of Vodafone and Fannie Mae). It recorded its third-best quarter in terms of profit. Its shares are near their record high, yet still they are trading at less than a 16 price-to-earnings ratio, while Amazon's growth-driven stock trades at a P/E of 190 at the time of this writing, Netflix trades at a P/E of 330, and even Google trades at a P/E of 30. Looking at things this way, you understand why Apple continues buying back its own stock.

What drives all these profits, however, are not numbers: it's actual products and customer satisfaction, two areas, where Apple excels. And with the 10th anniversary iPhone coming up late this year, we can see the company gearing up to beat its records once again.

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144 Comments

1. Bankz

Posts: 2531; Member since: Apr 08, 2016

HOLY!!!

7. AllFanboysMatter

Posts: 206; Member since: Feb 14, 2016

Apple is continuing the thrive year after year, despite all of the continuous hate and critisism. I've said it before and I'll continue to say it into the future: Apple does incredibly well because they make stellar products. Apple makes products that not only look great on the outside, but have internal components that allow them to go toe-to-toe with the best compeition there is. I've been an Apple fan for a while, and to see this year and last year be the time people referenced for the time of doom for the company, I get to sit back and laugh and tell all you haters that you all are losers. All these loser butt Android fanboys who absolutely hate Apple, and all these Samsung loser that do nothing but praise Samsung are now crying as we speak, in circle jerks. It's time to recognize that your company just cannot keep up. Apple by far makes the best tech products in the world to date. Samsung, LG, HTC...get your pens out and take some notes. There is more to a tech company than just having a ton of cool features that don't bring many tangible benefits. The true success lies in the purpose of the product. Look at airpods, they make listening to music magical. The ease of connection is the key innovation here, as well as the ability to charge in a small, compact package. I don't see HTC or Samsung doing anything similar, but I do see them being losers and blatantly copying Apple's innovative products. Let's admit it: whatever Apple does, the others follow. We see this time and time again. Hell, look at the very first iPhone and look how differently phones were then made after the innovative product came to fruition. Everyone now wants the touchscreen technology even though it was available before Apple came to the mobile sector. And that's what you call innovation haters. How many companies in the past 10 years have absolutely dominated strictly through innovation? Apple is the only one, and it's been a pleasure to witness. In summary, Apple is the best company on the planet with the best Mobile OS in the world. Haters will say it's limited, but they simply are ignorant and incredibly stupid. Apple is king, Apple is best, and Apple is here to stay. Haters, feel free to go cry now. As you see, despite all your stupid lame hate, you have only made the tech giant you thought was doomed, incredibly stronger.

14. krystian

Posts: 423; Member since: Mar 16, 2016

I agree that Apple is no doubt a great company that makes great products. I don't particularly enjoy their products but I'm speaking from a techie perspective. For the average user that wants a transparent experience without knowing any tech or worrying about anything, Apple wins hands down. And it's because of the less tech savvy crowd that they target that they make such great money. They sell a premium price and provide you a service you don't have to think about. But there will always be those who enjoy other experiences. Fighting over who is best is just silly. There are different crowds that hardware/os caters to. I don't like anchovies but someone else may, it's silly to argue preference.

15. maherk

Posts: 6770; Member since: Feb 10, 2012

Ladies and gentlemen, I present to you, iTechie. Identical to our old Techie we have come to love, with his long ass essays, biased comments, but in Apple's flavor.

18. AllFanboysMatter

Posts: 206; Member since: Feb 14, 2016

How dare you compare me to someone else? Maherk, do we have a problem? I'm doing nothing but sharing my opinion on a very important topic. All you have time to do is either hate apple or hate on people of this very community. It's incredibly clear to me that you are a loser and a no good Trump supporter. However, i will bite and argue your claim. Unlike techie, I provide rationale thoughts and justify it though strategic reasoning. Techie on the other hand does nothing but share incredibly stupid and false information and states it as if it's fact. The fact is, I'm nothing like Techie. I'm actually passionate about both sides of technology, but I'm incredibly passionate about companies that draw a lot of hate for no good reason. People who hate Apple are 100% idiots. They have no idea why they hate them other than hating the best. People naturally start hating whoever they perceive as top dog, but only when they use different products. How stupid and pathetic was the world become? This whole hating things that don't deserve hate is causing other companies to compete with Apple and fail over and over again. It's not hard to understand why Apple has great success. They employ the smartest people. They all have grown from a very influential leader in steve jobs, who has sadly passed but kindly and happily left his blessings all across apple campuses worldwide. So maherk, with that I'll leave you with this. If you don't want to actually add anything worth saying to the conversation, simply don't say it. No one has time for you to just be blabbering about BS that doesn't pertain to anyone. How about you share your thoughts on Apple dominating the market place. Are you not man enough to admit it?

27. maherk

Posts: 6770; Member since: Feb 10, 2012

**yawn**

66. AllFanboysMatter

Posts: 206; Member since: Feb 14, 2016

**checkmate**

77. Unordinary unregistered

LMAO CHECKMATE HAHAHAHA

126. sgtdisturbed47

Posts: 966; Member since: Feb 02, 2012

Rekt for days

35. McLTE

Posts: 922; Member since: Oct 18, 2011

"Allfanboysmatter" This is for you: ,I,, First.. I HATE Apple. Yep, I sure do. Does that make me an idiot? I guess so. Guess what! I have an opinion, and I KNOW why I hate Apple. It's not because they are "top dog" either. It's for several reasons. I personally recognize that Apple makes very good products. What you fanboys don't understand is that other companies make great products too. The difference is that Apple has done an absolutely magical job of getting consumers into buying into their closed system. Apple's marketing is fantastic, the products are gorgeous - but lets be real.. they aren't head and shoulders above anymore. These numbers amaze me - how does apple churn out mediocre updates and people blaze to buy?? I personally know of quite a few people who are tired of Apple and would like to try something else, but they feel that they can't. They are too tied into Apple and their "system" to start over with something else. What does that say about Apple??

58. sissy246

Posts: 7070; Member since: Mar 04, 2015

You are just like techie in all was but, you like apple and him Samsung and you don't have the spelling errors.

83. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

I like both companies. Just not equally. I don't care about cost, I care only about what I get for the cost. No one makes a phone worth $800. Samsung makes one that I am willing to spend $800 for, because if I want it that si what I have to pay. But in spending it, I know I get a device that does what I want and not one that has locked down features for no reason. Waiting on PA to show a similar breakdown on how Samsung has been selling 80M phones per quarter since 2011 and how Apple still having not broke this mark is reason to celebrate and draw all these pictures with Crayola's for the fans boy in the apple camp, but not do the same for us all. Considering that for the iPhone 7's, all retailers have been throwing as many deals to get people to buy, even deals Android phones have never had. Example, Android phones never had lease programs to get people to upgrade. The based iPhone 7 has been free since pre-order. The iPhone has had lots of BOGO deals too. So its not like Apple didn't have help selling the devices. Samsung surely helped with the Note 7 issue. Am sure Apple gained a couple million sales from that too. As far as the errors? I didn't have spell check on my phone turned on. Its off by default. It's on now. Now I have no errors. Happy?

95. sissy246

Posts: 7070; Member since: Mar 04, 2015

;) I know you forget to turn it on you have said that before. I was pissing off AllFanboysMatter. Even though I don't always agree with you, sometimes I do. And I don't mind ready you articles. Lol

105. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Well thank you kind sir!.

114. sissy246

Posts: 7070; Member since: Mar 04, 2015

I am not a sir, lol I am a mam lol

127. sgtdisturbed47

Posts: 966; Member since: Feb 02, 2012

Apple can boast that they actually MAKE MONEY off of the iPhone, but how much money does Samsung make off of their high-end devices? Samsung can easily "outsell" anyone because they have a dozen different devices on the market at any given time, from drug dealer prepay cheapos to the Note7 (lol maybe not that one). How many S7 Edges were sold during Q1?

130. marorun

Posts: 5029; Member since: Mar 30, 2015

If apple decide to limit themself to high end mean nothing to us. most ppl dont need high end device and most low to mid end android device are pretty good and can do everything even gaming pretty easy. Also no one else make ios device so in a way apple as an unfair advantage because if you want ios you have no choice to take an iphone. All this make this comparison useless. the only good comparison is how many ppl use each type of device. and android dominate there. proof is the growth for android play store is MUCH faster than the one for apple. From 5 time more profit a few year back they only make twice now.

118. NoToFanboys

Posts: 3231; Member since: Oct 03, 2015

But like techie, you're stupid enough to write very long essays and expect someone would actually read them.

37. darkkjedii

Posts: 30964; Member since: Feb 05, 2011

LMAOOOOO LMAOOOOO. Perfect description.

96. AlikMalix unregistered

Maher, the only thing this maybe in common with techie is that the post is long. He didn't rediclue any other brand, nor insinuate that people are stupid for buying something else and that they should buy what he thinks is better. He didn't post his opinion as "fact" handpicking half truths and outright lies as some proof. And he can spell and use grammar property. I will take his posts over techie just on readability alone.

99. Mxyzptlk unregistered

I wouldn't bother with him. He's still salty about Samsung ripping him off, but still defends them.

104. maherk

Posts: 6770; Member since: Feb 10, 2012

How am I salty about Samsung while defending them? Your math doesn't add up. And I know you're stupid, but here it is one more time, Samsung Lebanon called every Note 7 owner in Lebanon and offered $800 in cash for everyone who applied for a replacement, and when they knew that I was forced to sell it for cheap in America since I couldn't bring it with me on the airplane, they asked if I even have just the box so that they would give me any sort of compensation. Mind you, I know you're stupid and a blind fanboy, so this explanation is for everyone who doesn't know how my story ended, to get it from me, not a troll like you who will keep on going with his lie from post to another.

101. maherk

Posts: 6770; Member since: Feb 10, 2012

Seriously bro? I expect more from you, read his other comments then try to defend him. I know who he is, DJ does too, this is a well known troll hiding behind his other account. Not convinced, check comment number #13.

109. darkkjedii

Posts: 30964; Member since: Feb 05, 2011

I think that's Texhie too dude. He has a few accounts, all with a basic posting style.

103. sissy246

Posts: 7070; Member since: Mar 04, 2015

"People who hate Apple are 100% idiots" He is pretty much saying that here.

98. Mxyzptlk unregistered

Majerk actually said something relevant for once.

147. MySchizoBuddy

Posts: 159; Member since: Aug 23, 2011

totally agree. He is presenting totally biased FACTS about Apple. Clearly he doesn't know how to read numbers. Is $78B > $75B, Nope it isn't. Only a biased Apple fanboy would say they are. Teach them the correct math makerk.

16. NexusWinner

Posts: 6; Member since: Feb 14, 2016

Well said -Android Fan

31. Trex95

Posts: 2380; Member since: Mar 03, 2013

The other follow especially Samsung and Google.

32. Finalflash

Posts: 4063; Member since: Jul 23, 2013

That's cute and all but all facts point in the opposite direction. I mean I know you iFans would like to believe this fluff piece isn't a sponsored article by Apple but it is. The profits sank lower than even last year or the year before even though they sold more iPhones and made more money with all lines other than iPads. 3 million less iPads sold should have easily been eclipsed by 2 million more iPhones sold but nope, still lower. A higher asking price was linked with more sales of the iPhone 7 but that's also wrong as that would have easily offset the difference in profits. Likely, people are buying more higher storage previous models as well as trading in older phones (whether for discounts or installment schemes) which results in lower profits. Not to mention, this quarter has always been good for Apple, it's the drop in the subsequent quarters that is more telling. Everyone wants the newest phone ASAP so they buy earlier and earlier until they can at release. This has always been the case and which is why this quarter is usually untouchable. But even this year with Apples main competitor's phone exploding, they only managed 2 million more iPhone sales with tanking sales in major markets and mainly sales in the US. As much as the iFans like to think the gravy train for their favorite company won't stop, it's slowing down now and likely will stop like they all do. That is what happens when you have all your eggs in one phone basket. When companies compete, consumers win, and that is why Android (and even windows) users will always win while the iFans will be more than happy to lose. Apple makes the most money and therefore, iFans lose the most money of any set of consumers in the world.

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