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Bloomberg: Apple has entered a new normal, but it is still worth cheering

by:YoukingTech     2021-08-06
As a result, they all miscalculated. Although in the first nine months of this fiscal year, iPhone sales increased by 0.4% from the same period last year, sales in the third fiscal quarter fell short of expectations. Figure 2: iPhone sales growth has slowed down, but that’s nothing, because Apple has persuaded people to pay a high price for the iPhone X. In the quarter ending in June, the average selling price of the iPhone was US$724, which was US$118.50 higher than a year ago. If the average selling price is the same as last year, Apple’s quarterly revenue will increase by 6.5% year-on-year, but in fact it has increased by more than 17%. This reflects Apple's reliance on increasing product prices, which may not be exciting, but it is wise. Apple's new normal is also reflected in the company will regularly launch new products to promote sales growth. If you feel that Apple launches new product categories every year, it may not be a coincidence. It is unclear whether Apple Watch, iPad Pro, AirPods, or HomePod are selling well, because Apple has not disclosed their sales. But as Apple's product line far exceeds the size of the desktop (Apple once boasted that a desktop can put all the company's products), these products drive revenue growth as a whole. Thanks to higher prices, more than half of Apple's revenue in the 12 months ending June 30 came from the iPhone. Another quarter of revenue comes from Apple’s “service” business, which includes app sales commissions, Apple Music subscriptions, and AppleCare warranty items. Apple did not brag to the outside world about the information it disclosed to regulators: a considerable part of the recent service business growth has nothing to do with the direct demand for Apple products. In the two quarterly earnings reports recently submitted to the US Securities and Exchange Commission, Apple listed 'authorization' as one of the drivers of service revenue growth for the first time. It was reported on August 1 that for Apple, there is nothing wrong with being bored. This company, which once combined rapid growth and amazing profits, has entered a new stage of life. Obviously, Apple will not go back to a few years ago when iPhone sales soared. Higher prices and regular new product launches made up for its lack of growth. Although the profit is still huge, but no longer rushing forward. Apple is no longer exciting, and its performance is more financially reflected, which is good. Apple will never work late on weekends anymore. Wearing a woolen sweater and making a cup of chamomile tea, he lay down on the sofa. This new reality is different from the past, but it is a wiser and better life. At this time last year, investors expected Apple's 10th anniversary iPhone to bring a surge in sales that has not appeared since 2015. These activities include Apple's business arrangements with Alphabet, such as using Google search as the default search engine for Apple's Safari browser. In short, Apple is taking advantage of its popularity to generate more high-margin revenue by auctioning digital space on Safari. Apple is not necessarily satisfied with the life of a 'sofa'. Apple is spending unprecedented amounts of money, perhaps to find its next technological breakthrough, whether in health care, driverless cars, entertainment, or other areas that the public can't even think of. As a result of these expenses, Apple's revenue margin for the June quarter fell to its lowest level since 2008. Of course, in absolute terms, Apple's profits and cash flow are by far the largest among American companies. But because Apple’s expenditures are growing much faster than revenue, Apple’s new normal means that operating margins may decline. It remains to be seen whether large expenditures will bring Apple to the 'next big event'. At the same time, Apple is doing all the right things to keep its growth and profit engine running, even if it cannot rely on the old model of selling more iPhones each year. Investors are also very satisfied. After the latest earnings report was released, Apple's stock price rose about 4% in after-hours trading. Facts have proved that the quality that makes Apple great again is something that many people did not expect: that is finance.
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