Apple posts record Q1; Apple TV+ no impact

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Apple has published financial results for its fiscal 2020 first quarter ended December 28th 201 – the first quarter since its Apple TV+ streaming service went live. The tech giant posted quarterly revenue of $91.8 billion (€83.4bn), an increase of 9 per cent from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $4.99, up 19 per cent, also an all-time record. International sales accounted for 61 per cent of the quarter’s revenue.

“We are thrilled to report Apple’s highest quarterly revenue ever, fuelled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables,” said Tim Cook, Apple’s CEO. “During the holiday quarter our active installed base of devices grew in each of our geographic segments and has now reached over 1.5 billion. We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers — and a great driver of our growth across the board.”

“Our very strong business performance drove an all-time net income record of $22.2 billion and generated operating cash flow of $30.5 billion,” added Luca Maestri, Apple’s CFO. “We also returned nearly $25 billion to shareholders during the quarter, including $20 billion in share repurchases and $3.5 billion in dividends and equivalents, as we maintain our target of reaching a net cash neutral position over time.”

Cook, in a conference call, stopped short of revealing numbers for Apple TV+ despite saying the company is “measuring the success of its new Apple TV+ streaming service in terms of number of subscribers”. The SVoD service is priced a $4.99 per month, but is also free for 12 months for anyone that has purchased a new Apple device – so the assumption is that a majority of “subscribers” are currently non-payers.

Maestri noted that Apple TV+ did not have a material impact on financial results in the last quarter but it is expected that “over time it will start contributing to the growth of the services business”. He added that subscribers to all Apple Services stood at 480 million, and that the company had boosted its estimate of subscriptions for 2020 to 600 million.

In the UK, Apple was on track to account for nearly 42 per cent  of smartphone users this year, a slight increase from 40.5 per cent in 2018, according to eMarketer estimates. eMarketer was expecting there to be 19 million iPad users in the UK in 2019, accounting for over half (50.9 per cent) of UK tablet users.

Reacting to Apple’s results, eMarketer principal analyst Yoram Wurmser commented: “This was a strong quarter for Apple, primarily driven by strong sales of the iPhone 11 lineup. One note of caution in an otherwise strong report was that Services (which included Apple TV+) grew slightly below expectations. This miss could be attributed to the competition from Disney +, which launched at roughly the same time.”


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