Apple just released its fiscal Q4 2019 earnings marking a total of $64 Billion, which it had already forecasted to be somewhere between $61-$64 Billion. A large part of the hike in revenue comes from international sales, which include higher iPad and Apple Watch sales (in hardware) and AppStore, AppleCare+, and Apple Pay (in services), accounting for 60 percent of the total revenue.
Talking about the earnings, Apple CEO, Tim Cook, said “We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables, and iPad,” said Tim Cook, Apple’s CEO. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”
Apple CFO Luca Maestri added further, saying, “Our strong business performance drove record Q4 EPS of $3.03 and record Q4 operating cash flow of $19.9 billion,” said Luca Maestri, Apple’s CFO. “We also returned over $21 billion to shareholders, including almost $18 billion in share repurchases and $3.5 billion in dividends and equivalents, as we continue on our path to reaching a net cash neutral position over time.”
In the same news, Apple also established new Q4 records in some of the major developed and emerging markets (including India). This also marked an all-time revenue record for Mac in the country, along with the newly-announced ECG app, which has been available for a few weeks now. Commenting on the same, Luca Maestri said, “More than half of the customers purchasing Macs during the quarter were new to Mac, and the active installed base of Macs again reached a new all-time high.”
Coming to the iPhone, Tim Cook said he feels optimistic about the iPhone 11 in India, for which, he credits the ‘price moves‘ made by the company. He adds, the ‘price moves‘ have been ‘well-received‘ by the end consumers and ‘they do show a level of elasticity‘.
Compared to the iPhone XR, which was launched initially at a comparatively higher price (and then later received a price cut), the newest of the lot, the iPhone 11 was introduced at a lower price than the XR, which is probably one of the major reasons for its growing popularity and rise in sales. One of the reasons that make Apple products much more expensive in India is the exchange rate that Apple uses to price them. Generally speaking, with fluctuations in the exchange rate, Apple equates 1 USD to INR 100, which means, if an iPhone costs $1249 in the US, it would be available for a staggering INR 1,24,900 in India. This exchange rate can be discouraging for some, and as a reason, could be one of the reasons for depleting iPhone sales in India for the past year or so. To address this, Cook said that the company has used an ‘exchange rate that would have reflected a while back instead of the current exchange rate’ to make sure the pricing does not become unreasonably high in countries like India.
Furthermore, breaking down the total revenue, Apple has provided a category-wise breakdown for its products under different categories —
- $33.36 billion: iPhone
- $12.5 billion: Services
- $6.99 billion: Mac
- $6.52 billion: Wearables, Home, and Accessories
- $4.66 billion: iPad
The company has also forecasted its earnings in the 2020 Q1, which predict —
- revenue between $85.5 billion and $89.5 billion
- gross margin between 37.5 percent and 38.5 percent
- operating expenses between $9.6 billion and $9.8 billion
- other income/(expense) of $200 million
- tax rate of approximately 16.5 percent