Apple just announced its earnings for Q2 2017, reporting profits of $11.03 billion on revenues of $52.9 billion. The company sold 50.7 million iPhones, 8.92 million iPads, and 4.19 million Macs. Next on today’s schedule is Apple’s quarterly earnings call, which will kick-off at 2PM PT/5PM ET and we’ll have live coverage right here.
For all of the details from Apple’s earnings release, check out our full coverage here. Tim Cook had the following to say regarding the release:
As usual, we’ll have live coverage of Apple’s earnings call in this post. The call will begin at 2PM PT/5PM ET, with Tim Cook will likely speaking first, followed by CFO Luca Maestri. A question and answer session will round out the call.
Check out all of the details from the call below:
Tim Cook:
- Recapping earlier numbers, “we feel great about this performance”
- Strong performance despite headwinds, high demand for iPhone 7 and iPhone 7 Plus
- iPhone active installable grew by double digits year over year
- Services revenue “well on the way” to a Fortune 100 company size, again topping $7 billion
- App Store revenue up 40 percent year-over-year, number of developers offering apps increases by 26 percent
- “Double digit” growth for Apple Music & iCloud subscriptions
- AirPods: Demand still greatly exceeds supply
- Beats, Apple Watch, and AirPods combined are size of Fortune 500 company
- 165 million “paid subscriptions” such as Apple Music & iCloud
- Apple Pay: Live in 45 markets, 4.5 million transactions in U.S. alone
- Messages: “great momentum,” 380,000 messages per second during Super Bowl
- Tim says he’s “very excited” for WWDC (SHOCKER!)
- Talks up Apple’s latest environment report, reiterates earlier numbers that can be found here
- “Excited” about Apple Park, main building will house 13,000 employees under one roof
- Apple will continue to invest in U.S. market, spent $50 billion in U.S. last year
- Created 2 million jobs
- Now on to Luca Maestri to reiterate some of the earlier numbers from Apple’s release….
Luca Maestri:
- iPhone ASP hit $655 thanks to continued demand for iPhone 7 and iPhone 7 Plus
- Double digit revenue growth in U.S., Canada, Australia, Germany, Netherlands and Turkey
- iPhone channel inventory reduced by 1.2 million during quarter
- Services up 18 percent year over year
- iPad channel inventory flat, iPad “very successful” in segment of market where it competes
- New enterprise record for March, Capitol One has given associates Macs & Apple Watch
- Volkswagen has selected iPhone for “corporate standard”
- AAPL expects to return about $89 billion during next 8 quarters
Question and Answer
On withholding payments from Qualcomm:
Luca says Apple made it very clear they are accruing, no intentions on paying more than what’s currently accruing
On iPhone 7 Plus demand and initial supply shortages:
Tim says Apple initially struggled with the breakdown between 7 and 7 Plus, but lesson learned and balance has been restored
On China:
Tim says first half 2017 performance much better than first half of 2016
Mac revenue up 20 percent in China
Apple sold highest number of Plus models ever during Q2
Traffic in retail stores in China up 27 percent year over year, still “very important ” to Apple
7 out of 10 highest traffic stores now located in China
More color on 165 million subscriber numbers:
Same number quoted at 150 million
“Sense of momentum” thanks to 15 million growth
Number of paying accounts growing, while average payment per account also growing
Is there an opportunity for Apple to do more in wearables as some say Watch is disappointing?
Apple Watch represents a “key product” for Apple, company took its time to make it right versus launching first
Really proud of growth of Apple Watch business
Add the Beats + AirPods business and wearables are Fortune 500-size for Apple
Watch business is hard and competitors are falling out, but Apple still committed
“Really great pipeline”
iPhone at 9 year low in purchasing intent?
Apple believes slowing purchase cycle is partly due to increasing reports about what next iPhone will feature (HA!)
Tim says he hasn’t looked at the data in detail
Channel reduction coming for iPhone in June quarter?
Apple doesn’t provide guidance for channel inventory, goal is always to have optimal weeks + level
India?
Third largest smartphone market behind China and United States
Now that 4G is going up, huge opportunity for Apple and growth
Luca says Apple made it very clear they are accruing, no intentions on paying more than what’s currently accruing
Tim says Apple initially struggled with the breakdown between 7 and 7 Plus, but lesson learned and balance has been restored
Tim says first half 2017 performance much better than first half of 2016
Mac revenue up 20 percent in China
Apple sold highest number of Plus models ever during Q2
Traffic in retail stores in China up 27 percent year over year, still “very important ” to Apple
7 out of 10 highest traffic stores now located in China
7 out of 10 highest traffic stores now located in China
Same number quoted at 150 million
“Sense of momentum” thanks to 15 million growth
Number of paying accounts growing, while average payment per account also growing
Apple Watch represents a “key product” for Apple, company took its time to make it right versus launching first
Really proud of growth of Apple Watch business
Add the Beats + AirPods business and wearables are Fortune 500-size for Apple
Watch business is hard and competitors are falling out, but Apple still committed
“Really great pipeline”
Apple believes slowing purchase cycle is partly due to increasing reports about what next iPhone will feature (HA!)
Tim says he hasn’t looked at the data in detail
Apple doesn’t provide guidance for channel inventory, goal is always to have optimal weeks + level
Third largest smartphone market behind China and United States
Now that 4G is going up, huge opportunity for Apple and growth
