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Despite slowing iPhone sales, Apple revenue grows in “double digits” in India

In India, the growth of LTE, led by Jio, has contributed to a “huge opportunity” for Apple in the country, CEO Tim Cook said in an earnings call with investors and analysts. “Our growth rates [in India] are good, really good by most people’s expectations,” he added. “The 4G network investment really began rolling in in a significant way toward the last quarter of last year, as you know. But they are moving fast. They’re moving at a speed that I have not seen in any other country in the world once they were started, and it is truly impressive.”

App store and services

The App Store continued to rake in a lot of revenue for Apple and app developers. “The quarterly increase in the number of paying accounts was the largest that we’ve ever experienced,” CEO Cook said. Citing an App Annie report, he added that the App Store had made generated twice the revenue of Google’s Play Store in the March quarter.

Apple Music and iCloud subscriptions, plus third party subscriptions on the App Store, exceeded 165 million. Apple did not provide a service-wise or territory-wise breakdown of numbers here.

Apple Pay, Apple’s mobile payments service, released in Taiwan and Ireland, bringing the total number of served markets to 15. Apple wants to introduce Apple Pay in India, per a report in The Ken, but a lack of sufficient NFC-enabled POS terminals is holding the launch back. Samsung Pay, which works with non-NFC terminals, was rolled out in India this March.

Qualcomm dispute

The company has been fighting chipmaker Qualcomm for overcharging the former on royalties and patents. “The reason that we’re pursuing this is that Qualcomm’s trying to charge Apple a percentage of the total iPhone value,” instead of charging based on FRAND (Fair, reasonable and non-discriminatory) terms, Cook said. “And we strongly believe we’re in the right,” Cook added, saying that the courts will decide on the matter. Last quarter, Apple had stopped royalty payments to the chipmaker because of the dispute.

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Product sales

In India, March set a new record for sales for Apple, with revenue growing in “double digits”. “We continue to strengthen our local presence across the entire ecosystem, and we’re very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure,” Cook said.

Mac sales revenue grew by 14% because of increased demand for Apple’s new MacBook Pros, Cook said. AirPods, wireless earphones product, was overbooked beyond supply. “Our revenue from wearable products in the last four quarters was the size of a Fortune 500 company,” he boasted.

Financials

In a not-so-spectacular quarter, Apple’s revenue was slightly lower than analyst expectations for Q1 2017, at $52.9 billion. iPhone sales also slumped slightly below expectations, which CEO Tim Cook explained might be because of rumours about future product releases. The company sold 50.8 million iPhones, setting a record but again falling slightly below investor expectations. International sales accounted for 64% of the quarter’s revenue. As usual, quarterly revenue and unit sales of iPhones set an all-time record.


Financials | Press Release | Transcript

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I cover the digital content ecosystem and telecom for MediaNama.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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