Apple posts record Q3 revenues, but what next for the tech giant?
Tech industry's biggest money spinner, Apple, has posted its third-quarter earnings, and as it turns out, they are quite impressive. So much so, that the company surprised even itself as it posted a revenue of $53.3 billion – a figure that surpasses even its own projection by $1 billion.
Representing an increase of 17 per cent increase in revenue from the same quarter a year ago, Q3 2018 is also the best June quarter in Apple's history. Talking about the results, company's CEO, Tim Cook, said: “We’re thrilled to report Apple’s best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth,”
In a note to investors, the Cupertino-based tech giant also revealed that it clocked up $11.5 billion in profits – a 32 per cent growth on the figures it posted same time last year.
What fueled the growth
As the numbers reveal, Apple has had an exceptional quarter, one that it'll find difficult to replicate in the coming months. But what was it that fueled this growth in a quarter that is traditionally considered to be Apple's slowest of the year?
The answer is the iPhone.
Though Apple's biggest growth in terms of percentage was recorded from services and other products which posted 31 per cent and 37 per cent growth over the figures disclosed over the same quarter last year. It was the iPhone business that contributed over 50 per cent of the total revenues Apple generated this quarter – approx 30 billion of the total 53.3 billion in revenue.
The iPhone X gamble
Though the company hasn't disclosed individual share of the three iPhones it introduced last year, a quick look at the numbers reveals why it's the $1000 iPhone X that is driving the revenues up for Apple.
Despite selling almost the same number of iPhones as it did in the same quarter last year, the Cupertino based tech giant managed to increase its revenues by 20 per cent from last year. With the price point of other iPhones remaining the same, it was thus the flagship iPhone X announced at an entry-level price of $999 that led to the increase in revenue.
What next?
More iPhones X like Apple phones.
With buyers shrugging off the high price of the iPhone X and looking comfortable to pay a higher amount for a premium phone, Apple has revealed that it expects its revenues for fiscal Q4 to go up to $60 to $62 billion – a 16 to 19 percent growth over this period last year.
However, to reach such goals, Apple would have to bring to the market more phones that buyers would be ready to lap up. And if reports are to be believed, work has already started on this front.
Apple is expected to release an updated version of the iPhone X with a 5.8-inch OLED screen, a larger 6.5-inch OLED model (call it an iPhone X Plus), and a new mid-range model that will feature a 6.1-inch display and borrow elements of both the iPhone X and the cheaper iPhone 8 variants.
Targeting different price points, these three phones would give Apple a better chance of expanding its presence in the market and help it reach the revenue expectations for next quarter.
And if it does so, it would be good news for Apple on more than one front.
The tech giant currently has a market cap of $935 billion. However, if it posts strong numbers in the next quarter, and its stock continues to rise above 7 per cent, Apple's value could soon surpass the trillion-dollar mark, making it the first company to achieve such a feat.
However, before Tim Cook and Co can break out the champagne, it would be prudent for them to note that Apple isn't the only one closing in on the psychological milestone. Amazon is currently valued at over $870 billion, while Google's parent firm, Alphabet, has a market valuation of nearly $845 billion.