Like many of its users, Apple has perhaps become a little too reliant on its smartphone.
And those concerned about the direction of the company worry that it’s diverting all its figurative eggs into the iPhone basket to fuel revenue and profit. Such concentration is fine as long as iPhones are selling big, but it also creates big risks if there’s any stumble whatsoever with its bread-and-butter product.
Or at least that’s the way it looked heading into the company’s latest quarterly earnings report, which sent Apple shares to an all-time record close Wednesday. Sales of the ubiquitous iPhone continued to rise during the quarter. But the bigger surprises were in sales of iPads and the grandaddy of all Apple products, the Mac.
Apple saw iPad sales grow a surprising 1.9 percent, snapping four straight quarters of decline. And Mac sales grew almost 7 percent at a time when sales of traditional laptops and desktop computers have generally been weak throughout the industry.
Meanwhile, the world’s biggest publicly traded company, with a market value of roughly $780 billion, also said it sold 41 million iPhones worldwide in the three-month period ending July 1, up 1.6 percent from the year-ago quarter. That’s not a terrible performance considering the iPhone is still in the “lame duck” period ahead of an iPhone 8 launch widely expected in the fall. (Characteristically, the secretive Apple hasn’t officially confirmed the plans, though they never do.)
But investors were clearly pleased to see that the company is still churning out — and more importantly, selling — other gadgets while it attempts to develop the next blockbuster phone.
Some other notable details about Apple’s rally:
- Services revenue from Apple’s App Store, Apple Music subscriptions, iTunes, and other internet offerings was also strong in the company’s fiscal third quarter — up 22 percent to an all-time high of $7.3 billion. Apple’s services category is now as big as a standalone Fortune 100 company, chief executive Tim Cook said in a post–earnings conference call with analysts.
- For the quarter, Apple’s profit rose 17 percent to $8.7 billion, or $1.67 per share. Revenue was up 7 percent to $42.4 billion.
- Apple shares jumped nearly 5 percent on the day, closing at a record $157.14 a share. Since the announcement of the first iPhone in January 2007, Apple shares have risen nearly twelvefold.
- There were a few downbeat details in Apple’s otherwise sunny earnings report. Notably, sales in China fell 10 percent for the quarter. The company has also faced criticism there for its recent decision to pull software from its Chinese App Store that the government fears could be used by dissidents to communicate over private networks.
- Apple is one of 30 component companies tracked by the Dow Jones Industrial Average. Thus the device maker’s rally on Wednesday also helped lift the old-school market indicator to a new all-time record of its own.
The Dow closed above 22,000 for the first time on Wednesday, up 52 points, to 22,016.24.