NEWS: 11.06.20 – In advance of an earnings conference call last Thursday, Apple reported that it capped off a fiscal year (Q4 2020) defined by innovation in the face of adversity, referencing the ongoing impacts of COVID-19 to the company’s growth.
In an October 29 press release on its website, Apple announced its financial results, reporting that its $64.7 billion in revenue set a record fourth quarter for the fiscal year ending September 26, 2020. The Cupertino, California-based company also reported that the revenue from its services (e.g., Apple Music) — and, in particular, the Mac — had reached a new all-time high.
According to the press release, per Apple CFO, Luca Maestri, this all-time high throughout Apple’s major product categories — in terms of both sales results and the company’s active user installed base of hardware and devices — was due to the unmatched loyalty of its customers.
The day after Apple’s earnings conference call last Thursday, the Apple-centric website, iDrop News, reported that even though the ongoing global pandemic is holding much of the world back, it has become clear that it hasn’t slowed the company down in any meaningful way. With the exception of the iPhone, which dropped by approximately $2 billion due to the lack of new iPhone hardware released in Q4 2020 (as a result of the delayed announcement of the iPhone 12), every other category saw staggering growth compared to this quarter last year, with services and the Mac each growing by around $2 billion overall.
iDrop News reported that Apple’s services category jumped to $14.5 billion this year.
In other categories, the wearables, home, and accessories category (e.g., Apple Watch, HomePod, and AirPods) earned revenue of $7.9 billion for Q4 2020. The only category in which Apple saw a drop in sales was, as reported by iDrop News, the very one where everybody was expecting it to happen, the iPhone, which saw revenue of $26.4 billion.
Mac revenue, meanwhile, according to iDrop News, blew everyone’s expectations right out of the water, adding that this was somewhat significant due to the fact that there weren’t any major product announcements of desktop and notebook computers from Apple during the last quarter (the most recent product release was a refreshed lineup of iMacs in August of this year).
Taking a closer look at the numbers on the day of the Apple earnings conference call last Thursday was Macworld magazine, which reported that the Mac generated $9 billion in revenue, up a staggering 29% over the same quarter a year ago. The publication also reported that sales of the Mac were strong across the board.
Citing Maestri’s report from the Apple earnings conference call, Macworld provided the following details with regard to the Mac:
- according to Apple’s chief financial officer, Mac growth was in the strong double digits in every geographic segment
- the all-time overall record was matched by all-time record sales of the Mac in both the Americas and the Rest of Apple’s Asia Pacific category
- in addition, the Mac also set fiscal fourth quarter records in both Europe and Japan
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“It was the all-time high for Mac in the history of the company, and, not by a little bit, but by $1.6 billion,” said Apple CEO, Tim Cook, in the company’s earnings conference call.
Macworld also reported that the iPad had a good quarter as well, with $6.8 billion of revenue, a 46% increase versus the same quarter last year. According to the magazine, this was the iPad’s biggest growth quarter since its very early days and a sign that the iPad is making a comeback after a slump in sales over the past few years.
However, the biggest takeaway from the Apple earnings conference call, as reported by Macworld, was the driving force behind all of this growth: the global pandemic (at least, partly due to it), which prompted purchases of hardware and devices for remote workers and students alike.
In the Apple earnings conference call, per the report from Macworld, Apple’s chief executive officer explained that normal has become something different. According to the Apple CEO, the changes that have taken place — in terms of people working and learning remotely during the global pandemic — aren’t something that will return to the way it used to be anytime soon, and, as a result, the Mac and the iPad are even more important in those environments.
“From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues,” said Cook in the company’s press release.
Also on the day of the Apple earnings conference call last Thursday, the business-centric cable news network, CNBC, reported that Mac and iPad revenue slightly exceeded Wall Street expectations. According to analysts’ estimates, it was predicted that the company would earn $7.93 billion in Mac revenue and $6.12 billion in iPad revenue during Q4 2020.
CNBC reported that revenue for the Mac and the iPad both exceeding analyst expectations was most likely driven by strong work-from-home trends during the global pandemic (corroborating the report from Macworld).
However, according to CNBC, because of uncertainty related to COVID-19, Apple hasn’t offered guidance for the past two quarters. For this very same reason, the company also declined to offer guidance for Q1 2021.