Yesterday Apple disclosed its fourth quarter financial results and it was simply astounding sending wall street analysts scrambling with their way-off forecasts. In the last quarter of 2014, Apple made a stunning profit of $18B (38% growth from a year ago) on a revenue base of $74.6B. This is the record profit made by any company ever! During that quarter iPhone sales reached 75m with a hefty growth in China market, and iPhone revenue reached $51.18B (70% of total revenue). This is more than Google and Microsoft revenue combined for that quarter. As Tim Cook said, they sold 34000 iPhones every hour, 24 hours a day, every day of the quarter. Apple now is the most valuable company in the planet!
The sales were fueled largely by the larger screen iPhone6 and 6Plus, introduced last fall. They were of higher price and demand exceeded supply, as usual. This growth again affected the tablet sales which declined, clearly showing customer’s preference of large screen smartphones with higher memory. Interestingly Mac sales also went up during the quarter.
Apple sits on $187B cash now and maintaining this growth would be a challenge. But the new Apple Watch is coming out in April, adding a new revenue stream. Hopefully it will be another product success in a new category. What one must appreciate is the relentless excellence in quality and delivery besides the unique design of Apple’s products. Unlike Samsung, Apple figured out how to crack the China market which has a huge appetite for large screen smartphones such as iPhone6 and 6Plus.
Hats off to Apple!