Apple Q1 2016 results: $75.9b revenue, $18.4b net income, 74.78 million iPhones sold

Igor Bonifacic

January 26, 2016 4:34pm

Apple announced its Q1 financial earnings this afternoon.

For the three month period ending December 26, Apple met its Q1 expectations — though just barely, which is leading to disappointment among some analysts and investors.

The company is reporting $75.9-billion USD in revenue (it had forecasted a revenue between $75.5 billion USD and $77.5 billion USD), which led to a net income of $18.4-billion USD. Apple sold 74.78 million iPhones this past holiday season, which, while a record for Apple, is only a slight increase from the 74.5 million iPhones it sold at this same time last year. All told, iPhone shipments grew by a modest 0.4 percent, which is the lowest that number has grown since Steve Jobs introduced the world to the iPhone in 2007.

The company also sold fewer Mac computers this quarter. Apple says it sold some 5.3 million Macs in Q1 2016, a less than one percent decline from the same last year. Likewise, despite the introduction of the iPad Pro, the company sold fewer iPads this quarter — 21.4 million in Q1 2015 compared to 16.1 million just one year later. The company is also still not releasing specific Apple Watch sales statistics. However, the company’s “other products” category — which includes not only sales of the Apple Watch, but sales of the iPod, AppleTV and Beats headphones, as well — contributed $4.3 billion USD to the company’s bottom line, which is a significant increase compared to the $1.3 billion USD the category contributed when the Apple Watch first went on sale.

“Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV,” said Tim Cook in a statement issued to MobileSyrup. During the company’s investor call, Cook noted Apple did extremely well despite turbulent macro economic conditions around the world. The average sales price of the iPhone hit $691. $41 of that came from the disparity between the Greenback and other currencies like the Canadian Dollar.

He also said the company saw a greater number of Android switchers than ever before.

Like much of the rest of the mobile industry, Apple is seemingly coming to terms with the stagnating smartphone growth. While bullish about the potential growth still left to squeeze out of the Chinese market, sales in Greater China only rose by 18.4 percent this past quarter.

On the flip side, the company’s $18.4 billion USD net income is the largest ever reported by a publicly traded company, and according to Apple CEO Tim Cook, there are now more than 1 billion active Apple-made devices across the world, a first for the company.

Apple is well-positioned to move into the future, but it will have to find new ways to grow and diversify its business if it hopes to avoid stagnating.

  • Techguru86

    And they report that Apple’s sales growth has fallen flat since 2007, the market has changed in the last 3 years, Android has matured and the OS is much more reliable now and a lot more affordable

    • yoyo ma

      Android OEMs are all in deep deep decline except Huawei (due to success in china), Vivo, Oppo, and TCL. LG/Sony/Samsung/Moto/HTC/Xiaomi are all selling less or a LOT less than previous years.

    • It’s Me

      Apple going flat but still setting records in revenue and profit while others see growth, revenue and profits decline steeply, yet someone someone sees this as a sign of Android’s maturity.

    • yoyo ma

      That and Tim Cook just said on the call that they recently had the most switchers from Android to iPhone ever.

    • Techguru86

      But you might be seeing a lot of android users coming from older models which are inferior to what’s offered now, I have seen many users do the opposite with devices like the G4, S6, Nexus5s and 6p

    • Vito R.

      Nobody’s Android sales are climbing except for some Chinese oems. The sales growth in Android is not coming from the handsets you mentioned.

    • Mo Dabbas

      Nexus 6P is made by Huawei which is a chinese OEM (here you go, I found one)

    • Vito R.

      There’s no sales growth coming from the 6p. Nexus sales are overall insignificant in the grand scheme of things.

    • Mo Dabbas

      oh, I thought you meant with handset as the maker. lol. long day for me.

    • MassDeduction

      Presumably BlackBerry’s Android sales are climbing since they’re new to the Android device market. 😉

    • ShaBi

      And how many people is that? 10? 20? And that’s only in your community alone. We’re talking about globally here, with all kinds of reports in the last couple years telling us Android has been on the decline.

    • Mo Dabbas

      “the last couple years telling us Android has been on the decline.” — this is actually not true. As a matter of fact, some has shown iPhone sales are declining in the US (it’s biggest market) for android devices. The main market that showed growth in iPhone sales vs Android was china and that’s mainly because 2014 was the first time apple sells iPhones in china.

    • Vito R.

      It’s true in the high end. Androids growth has been in the low end of the market.

    • MassDeduction

      Lots of movement every direction (to and from iOS, to and from Android, to and from Windows Phone, you name it). Which makes me further question Mobilesyrup stating, without any attempt to substantiate it, that people tend to stay within an ecosystem once they adopt it. I’ve found the reverse to be true, most people I know get an “itch” to try something new. I can’t think of anyone I know who is still on the same smartphone OS they started on. I personally switched from iOS to Windows Phone. I know lots of people who have moved back and forth between iOS and Android, and several who’ve migrated from both of those to Windows Phone. I know some who’ve tried out another mobile OS and then gone back to the original. Despite suggestions to the contrary at times, the constant seems to be a lack of a constant. Or have we forgotten when first Palm, and later BlackBerry, had huge marketshare? Most of those people have migrated too, obviously, given the sharp declines in those OSs.

    • Columbo

      I guess that means more iPhone users switched to Android than ever before too, since total growth was flat.

    • Mo Dabbas

      There are always people switching back and forth. People get bored and they always want something new.

    • mola2alex

      As the market grows, you will always statistically see the most users switching, what’s important is the rate as a %. Android can likely make the same claim as seeing the most users switching.

    • cartfan88

      Hey someone who gets math. Cooks dig at Android switching clearly an absolute number. And there’s a new high in those switching to Android but that gets left out. At least disclose both directions numbers.

    • mola2alex

      Exactly. Blackberry also saw the most iPhone and other Android users switching to BlackBerry Priv.

    • cartfan88

      Lols. Nailed it.

    • Ipse

      Yeah…the market is furiously looking for some bad news…or to fabricate them for profit taking.
      I’m not Apple fan, but if these numbers are bad, I don’t know what is good anymore.
      We expect endless double digit growth from Apple and China…reality check aisle 5 please….

    • Vito R.

      Samsung (largest Android vendor) has seen declining sales for quite a while already. The surprising this is that it’s taken this long for Apple to finally saturate the market.

    • Mo Dabbas

      samsung share of the pie wasn’t really taken by apple. The sales drop were due to chinese makers since they are offering similar packages with almost half the price.

    • Vito R.

      Never said their share was taken by Apple – although Apple continued to grow in the high end while Samsung’s sales shrunk. I would think that Samsung was getting hit on two fronts – high end by Apple and low end by Chinese OEMs.

    • Jon Shopping

      Xiaomi’s sales went up.

    • It’s Me

      Flat growth that continues to set records for revenue and profits is sow thing a lot of companies would aspire to. Hell flat growth with astronomical revenue and profits, even without setting records would have still been impressive.

      Android still has a long way to develop before anyone involved starts seeing these levels of success.

    • cartfan88

      No one in Androidland is going to see that level of profits off of Android ever. As an investor making money buying Apple at the right time is a better bet than Android centric companies. As a consumer though I get more value out of a Android phone at a given price point due to intense competition…,as has been said the PC wars redux. I’m ok with a deal on that front,

    • Mo Dabbas

      For the first part:
      But if I was an investor I would actually worry. Think of it, iPhone is the biggest money maker for apple. True that the 6S may not be worth the upgrade if you own an iPhone 6, but there is little growth. Which means pretty much the same who are jumping the two year cycle are buying a new iPhone. Or if Tim says they had a record number of people jumping to iPhone that means there is a record number of people jumping to android.
      Also, Investors are probably looking into the next big thing from apple….. which is?? Apple has been quite in making breakthroughs for a while now. They were the first to reinvent the music business (iTunes), first to redefine a phone, first to introduce tablets and that what made them great. But now, what is the next big thing from apple?? (please don’t tell me it’s the iWatch coz that thing is meh)
      Lastly, investors are looking into the global economy. Canada is not the only place where the economy is sinking. China’s economy (the market expected to be the biggest market of apple soon) is also not healthy lately. Same goes with the UK where iPhone sales are among the highest. Weak global economy is to the disadvantage of premium brands. Also, with the rise of the USD it will be more difficult to sell apple products as before.

      For the second part:
      I doubt Google designed android as an open source OS so that android oem’s would get crazy rich. Google’s plan is to let as many as possible use their services. looks like it’s working. I believe we are gonna witness a lot of buyouts and mergers in the coming years with android makers until eventually we get a handful of phone makers (including apple) that will own all the phone market. by that time, android oem’s (the ones that survived) would be making some serious money.

    • Adderbox76

      Flat growth but “record setting revenue” comes from constantly increasing your profit margin to make up for flattening YoY sales.

      That’s not a tenable strategy long term. But with 63% of Apple’s total revenue coming from one single product, they’re just trying to milk as much as they can to pad their bank account to buy time to attempt to come up with “the next big thing”, which they have so far failed to do.

      Apple is on a time-limit. Their one product that makes them most of their money is flattening in popularity as mid-range handsets get better and high-end devices are increasingly being seen as an unnecessary luxury. Meanwhile they haven’t been able to replicate it’s “wow factor” to any great degree. In short, their golden cow is drying up and they don’t have another one in the barn yet.

    • cartfan88

      A lot of their competition is from their own products. The larger phones taking from iPad sales and both the phones and tablets being able to be used longer without becoming outdated.

    • Elton Bello

      Affordable haha

  • yoyo ma

    18.4B profit is insane.

    • neo905

      Microsoft in the 2000’s made a sick amount of money also but the stock was flat for a decade because there was no growth and they had a rudderless ship with little to no innovation. Most of all they were living off of past successes. Fast forward to the now and Apple is repeating the same thing. Things in tech change very quickly.

    • It’s Me

      Nothing lasts forever.

      But we’ve been hearing about Apple’s time being up for so many years it doesn’t carry much water anymore. Hell, early last year we had people right here telling us how this was going to be a rougj year for Apple because China. Seem to recall that was you.

    • neo905

      I am not going on heresay or conjecture. They literally have no iPhone growth in their strongest quarter historically. Their guidance is weak and US sales are actually in decline this qtr which I can’t remember ever happening. There is a reason the stock has been performing so poorly. It is simply a value stock now. The growth story is over. That doesn’t mean they still won’t make a tonne of money. The aggressive nature of their buybacks and dividends was a tell.

    • Vito R.

      True. Seems the high end smartphone market is saturated – not sure how much a “cheap” iPhone will be able to help. They’re already predicting a steep decline for next quarter.

    • cartfan88

      There’s an investor base that still think previous growth is representative of future growth and that gets much harder to do when you now have a large base. 5 years ago it was a much smaller base. There are generating a lot of cash and could increase the dividend substantially which would attract more value oriented investors. A 5% dividend which they could easily pay would be attractive,

  • southerndinner

    Brad Fortin is busy fapping, he can’t be reached at the moment

    • It’s Me

      And you’re trying to catch a peek?

  • All those billions and still a “disappointment” in eyes of Wall Streets

    • Vito R.

      Yes, because there is no growth. People buy the stock anticipating it will grow, no growth = no big return on investment. No one is suggesting it was a “poor” performance – most profit in history – just that the growth story seems to be done. For now.

    • I think it’s the market slump. They will likely rebound with it. China alone should be enough to keep them growing

    • Vito R.

      Definitely that has an effect – but I think the hay day of monster iPhone growth is behind us. iPad peaked a couple years ago and the iPhone looks like it’s peaked as well.

    • ShaBi

      More like smartphones as a whole has peaked. Most people have one nowadays, and most will not upgrade every year.

    • Vito R.

      I think the iPhone market has peaked. There is still growth in the lower end of the market I think.

    • cartfan88

      Yep…no one escapes the tech lifecycle…rapid innovation to now what looks like stabilization. The iPhone 6/+ brought the size many were waiting for but the need to upgrade every year is becoming less needed. iPads entered this territory a few years ago. They will still generate gobs of cash though and billions in earnings but less growth or perhaps slight decline.

      I keep saying their currency adjustments to countries outside of the US$ will eventually make people upgrade less often or search out cheaper alternatives.

    • Vito R.

      That’s not an issue unique to Apple. Samsung faces the same pressures but they’re more concerned with sales than margins at the moment.

      I’m sure that’s something Apple is always keeping an eye on – keep prices the same and lose profit, raise them too much and lose sales. That said, I’m sure they know to the DOLLAR how much they can charge before they take a big hit on sales. iPads are still a deal relative to the exchange rate – that can’t last much longer…

    • Mo Dabbas

      I think smartphone growth in general is reaching a peak.

    • neo905

      China is entering a credit crisis. They’ve stopped building ghost cities and there are trillions in bad loans from malinvestment the past decade and more. Not sure if you realize what kind of trouble China is in but it’s not good.

    • We can say that here but China is a completely different country compared to the Americas. They can can easily make a come back once the rest of the world has money to spend again. Everything is made in China, so it wouldn’t take long if global business picks up for China to rebound.

    • neo905

      You have a lack of understanding what is going on in China. They are trying to transition for a manufacturing based to a consumer based economy. That will be a long drawn out decade long process that will be very difficult to execute. Especially when you are a command communist country but also trying to be a capitalist one, which is sort of like sucking and blowing at the same time.

      There is also a unprecedented amount of corruption and money laundering in that country (see Vancouver real estate). Everything has been distorted in that country, their currency, their stock market, their housing, their loans to companies that had know business expanding at the rate that they did.

      They have major structural issues and they don’t have demographics on their side as they are now an aging population and not a young one like Brazil.

      It is naive to think they will just rebound in short order. This will be a multi year process with many speed bumps and that is if they know what they are doing which is questionable at this point.

    • Mo Dabbas

      I agree that china is one of the biggest markets for apple, but China’s economy is not doing that good lately.

    • They are but they can easily make a comeback. Once oil makes a rebound they can lower their yuan to increase manufacturing and boom, Super China

    • Mo Dabbas

      Some are expecting oil prices to stay low till 2020.

    • They have so many speculations about oil. For our dollars sake, I hope it rebounds quicker.

      I personally don’t think it will last that long but I also don’t think it will get as high as it was a year ago

  • St. Misery

    Flat sales or not, those numbers are nothing to cry about. Maybe one day they’ll consider getting into the lower end of the smartphone market. It’s a segment they’ve never touched before. The trick would be to do that while not cannibalizing their own premium segment. It would get them better presence in China and India, that’s for sure.

    • ShaBi

      Not gonna happen, that’s for sure.

  • Brad Fortin

    $4.3 billion in “other”? I wonder if any other company has that kind of success with an “other” category.

    • Vito R.

      That’s money that gets lost in the sofa for them 🙂

      They make more profit on *just their watch* than all smartphone makers (aside from Samsung) combined make on their phones.

    • Columbo

      Depends how much you lump into your “other” category. If Google reported sales for Nexus phones, Chrome tablets, and “other”, it’d be a pretty staggering amount.

    • Mo Dabbas

      Lot’s of beats product sales eh? Bet Dr. Dre regret selling the company after seeing that crazy revenue.

    • Brad Fortin

      Sure, Beats sales.

  • gommer strike

    Net income of 18.4 BILLION and Wall Street moans and groans. Oh gosh Apple’s doomed, it’s dying, naw this billion thing…not a lot of money, anybody can do *that*.

    • Vito R.

      That’s not what their saying at all. It’s more like “I bought their stock at $100 hoping it would climb to $150 but that’s not going to happen now that their growth has flattened out. Sell!”

    • Mo Dabbas

      yea. That is how it is exactly. Especially that there was a report by goldman sachs that expected apple stocks to reach 160 in 2016. Many of the investors were probably thinking “buy buy” believing it’s gonna be 160 in the first weeks of 2016. Now with news about no growth and having the stock price drop, many are selling.

    • Elton Bello

      Wall street want to squieeze your nuts tiol they bleed and them some. Stock Market and public offerings are the death of the common folk.

    • Brad Fortin

      There was a recent article on Above Avalon called “The Two Apples” detailing how Apple the company and AAPL the stock are not representative of each other. It’s a good, relevant read.

  • southerndinner

    Stocks still free falling

    • It’s Me

      Every time it’s been in free fall over the last 5-6 year, the bounce afterwards has always been much greater. Which always leads to much whining and gnashing of teeth.

      We’ll see if history keeps repeating itself.

  • vn33

    Apple met its expectations, but some are still disappointed?
    Talking about hard-to-please people! LOL!

  • GPman

    And this is what is wrong with the world… Investors and stockmarket. Billions and its disappointing. All the time you hear companies laying off staff because it didn’t make enough money but still made billions. Can’t pay better wages because it would effect the stock bottom line so they don’t. Happens over and over again.

  • Me

    They also said they are preparing for the first ever quarter with a drawback in Q1.

  • Techguru86

    Most of IPhone sales are in China, in a market where Apple has never been before, the last 2 launches, almost all the devices went their, North Amercia, Android has the majority of market share, there’s cheaper alternatives to IOS, OnePlus,, Nexus, Samsung, Hauwei , HTC, Sony now bbry coming in and let’s face it, IPhone aren’t offering anything new, Android cameras have surpassed IOS now and screen displays are far greater

    • MassDeduction

      Apple does sell a lot of devices in China, but their North American marketshare is actually higher than their Chinese marketshare. Last I checked, North American marketshare was approximately 40% iPhone, 55% Android handsets, and 5% Windows Phone and other. Meanwhile, Apple’s marketshare is about 20%. That’s a huge number of devices given the size of the market, but the huge number of cheap Android devices make it a marketshare challenge for Apple.

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