Apple has more than 1.8 billion active devices worldwide 

on the morning of January 28th, the fourth quarter of each year is the annual shopping season and the season of the apple harvest. In the past ten years of Cook’s tenure, except for 2018, Apple has handed over a record-breaking financial report in the fourth quarter of each year, refreshing the outside world’s imagination of a technology company’s revenue and profit margins.

Cook is synonymous with beautiful financial reports. During his ten years in charge, Apple’s revenue soared from $46.3 billion in the fourth quarter of 2011 to $123.9 billion in the fourth quarter of 2021, an increase of 267%; net profit soared from $13 billion to $34.6 billion in the same period, an increase of 266%. Despite the impact of the new crown epidemic and supply chain, Apple still achieved revenue of up to $378.35 billion in 2021.

As of December 25 last year in the fourth quarter (Apple’s first fiscal quarter), Apple’s revenue and net profit were higher than market expectations. Revenue for the quarter rose 11% year over year to $123.9 billion, while net income rose 25% to $34.6 billion. And, with the exception of the iPad business, Apple grew more than expected in almost every business in the quarter. Driven by this, Apple’s shares rose 5% after hours.

It is worth mentioning that the iPhone business revenue in the quarter increased by 9% year-on-year to US$71.63 billion, accounting for 58% of revenue. This shows that the iPhone 13 series has been recognized by the market as expected. In particular, Cook emphasized that this increase in sales was achieved amid supply chain shortages. The subtext is that if it weren’t for a supply chain issue, the iPhone could sell for more.

Earlier media reports that Apple may cut its expected production of the iPhone 13 series due to continued chip constraints after Apple planned to produce 90 million iPhones in the fourth quarter. However, Cook also emphasized that the chips that Apple lacks are not high-end core CPUs such as the A-series or M series (both are 5nm process), but mature process chips required for many components such as displays and wireless components. The lead time is even closer to 22 weeks.

Services revenue rose 24% year over year to $19.52 billion, an increase of more than 20% again. Apple currently has more than 1.8 billion active devices worldwide, and over the past few years, Apple has been focusing on developing various Internet services around these devices and users.

Internet services such as music, news, video, and iCloud are not only Apple’s second-largest business but also Apple’s fastest-growing and highest-margin business. Apple’s CFO revealed on an analyst conference call that the total number of subscribers to Apple’s services business has exceeded 700 million. Cook specifically mentioned Apple’s fitness content service, Fitness+, which he said, while small at the moment, has a huge opportunity for growth.

According to Bloomberg, Apple is planning to launch an NFC chip-based payment terminal service on the iPhone, which will disrupt the cash register ecosystem of small merchants in the U.S. market. Consumers only need to touch the iPhone of the small merchant with a credit card or mobile phone, and the checkout service can be completed without any additional hardware.

This new service will undoubtedly hit Square (now called Block)’s current core business in the US market. Square’s checkout hardware for small merchants costs $299, plus an additional 2.6 percent processing fee plus 10 cents per payment. Unlike the Chinese market, the U.S. market does not have the habit of swiping QR codes to pay.

Mac business revenue rose 25% year over year to $10.85 billion. Since the launch of self-developed M-chip notebooks in the fourth quarter of 2020, Apple’s self-developed chip products have not only won market recognition but also achieved continuous growth in revenue and profits. According to analysts’ expectations, after Apple launches high-end desktop PCs based on M chips this year, it will successfully complete the transition from Intel chips to its own chips.

The Greater China business grew by 21% year-on-year to US$25.78 billion in the quarter, accounting for 21% of revenue. Cook emphasized in the analyst conference call that iPhone sales in Greater China are very good, mainly due to the upgrade of old users and the replacement of Android users.

Previously, data from market research companies such as Counterpoint showed that in the fourth quarter of last year, Apple’s mobile phone shipments in the Chinese market increased by 32%, gaining a market share of 23%. After 2015, it once again became the No. 1 brand in the Chinese market. Since the release of the iPhone 13, Apple has always occupied the top spot in the Chinese market.

The iPad business was the only business to experience a decline in sales during the quarter. Although Cook blamed it on the impact of supply chain problems, it is undeniable that Apple is used to releasing new iPad products in the first quarter, and the upgrade rate of iPad products is far less frequent than that of iPhone, and the growth of Mac sales is more affected by M chips. stimulus. However, Apple mentioned that half of the iPad sales are from new users, indicating that the market still has room for growth.

Since the outbreak of the new crown, Apple has stopped releasing its guidance for the next quarter, citing the impact of various uncertainties, and this time is no exception. But Cook gave the market a shot in the arm after the earnings report: supply chain problems are improving.

Apple’s supply chain issues are improving, he said. While supply chain issues were more severe in the fourth quarter than in the third quarter, the first quarter is expected to improve. Indeed, the long waiting time for many products directly affects consumers’ enthusiasm for shopping. After all, many people shop at the end of the year for the purpose of using them immediately or giving gifts.

Cook said in October last year that Apple’s revenue in the quarter was reduced by $6 billion due to supply chain problems, and the lack of chip production capacity was the biggest problem in Apple’s supply chain. Although Cook did not give an estimated loss of fourth-quarter revenue due to supply chain issues, the market will of course respond positively when a supply chain guru like Cook says the problem is improving.

What other businesses can Apple improve in the future? The Apple Car is still at least a few years away. Recent media reports say that Apple’s car software team has a lot of turnovers, and there are different opinions on the product development direction of Apple’s car. Perhaps Cook himself doesn’t know when Apple will launch a full-fledged car. product.

There are also rumors that Apple may release AR/VR products this year or next year, but Cook did not answer the analyst’s question about the metaverse at all. According to Apple’s habit, before the official release of new products, they all refuse to discuss.

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