By now this is getting boring: once again, Apple has reported quarterly numbers that blew past Wall Street expectations and demonstrated that the world’s most valuable company continues to enjoy surging demand for its products, particularly the iPhone and iPad.
Apple reported $39.2 billion in revenues, ahead of Wall Street expectations of about $37 billion. Net profit was $11.6 billion, or $12.30 per share, nearly double their level last year and also above Wall Street expectations.
The big hit was the iPhone, which sold 35.1 million units, up 88 percent from last year and well beyond analyst expectations of 30.5 million.
Oddly enough, iPad sales fell a little short of analyst expectations, at 11.8 million units. (Analysts had been expecting 13 million.) But this quarter’s iPad sales still represented a 151 percent gain from last year.
Total iPad sales probably were hurt by the fact that Apple introduced a new iPad model during this quarter. “The iPad 3 was only on the market for 28 days in this quarter. People held off buying new iPads waiting for this new model,” says Tim Bajarin, president of Creative Strategies, a research firm that tracks Apple.
If not for those people holding off, “Apple could have probably hit 15 million iPad units last quarter,” Bajarin says, adding that in the current quarter, he expects Apple will sell 20 million iPad units.
Apple shares immediately began to rise after Apple released its results. Apple stock had been dropping in the days leading up to the announcement on worries that Apple’s iPhone sales might fall short of expectations.
Over the last five trading days Apple shares fell from $620 to $560, a drop of nearly 10 percent. That happened after Verizon and AT&T both reported selling fewer iPhones in the March quarter than they had in the December quarter, which spooked some analysts.
They need not have worried. Yes, sales declined after the holiday quarter, but the holiday quarter was a crazy blowout, one of the biggest quarters that any company in any industry has ever reported—a quarter that established, once and for all, that Apple has become the most dominant tech company of all time, stronger than IBM or Microsoft were in their heyday, as I wrote at the time.
Apple has become the most dominant tech company of all time, stronger than IBM and Microsoft were in their heyday.
Lost in all the fear about Apple’s declining unit sales at Verizon and AT&T were that both carriers also reported that the iPhone represented the vast majority of their total smartphone sales, dwarfing all of the Android-based smartphones put together.
Looking ahead, Apple said it expects to do $34 billion in revenue in the quarter that ends in June. That’s below Wall Street expectations of about $37 million. But Apple is notorious for low-balling its projections only to blow them out later, so at this point it’s hard to take them seriously when they try to guide analysts to lower their estimates.
Ever since Apple turned in that barn burner holiday quarter, pundits have started predicting the stock will reach $1,000 per share, making Apple the first company to have a market valuation of $1 trillion. Those predictions have been based in part on rumors that Apple will introduce a television this year and that it will be a smash hit, just like everything else Apple sells.
But the way things are going right now, Apple looks like it could hit the trillion-dollar mark with or without an Apple TV. The shift from PCs to mobile devices is the biggest megatrend in computing right now, and Apple’s iPhone and iPad are the two most dominant products in that space.
But there’s more to this than just cool hardware. Apple controls every piece of its solution: hardware, software, retail stores, and online stores. Nobody else has anything close. “It is an almost impossible formula for Apple’s competitors to imitate,” Bajarin says.