Wednesday, April 18, 2018

iPhone X Profits

Juli Clover:

The iPhone X accounted for 35 percent of total worldwide handset profits in the fourth quarter of 2017, according to new estimates shared this morning by Counterpoint Research.

The device generated 5x more profit than the combined profit of more than 600 Android OEMs during the quarter, despite the fact that it was only available for purchase during the final two months of the year and in spite of reports pointing towards lackluster sales of the device.

Note that iPhone X was new then, whereas iPhone 8 went on sale at the end of the previous quarter. But still: wow.

Update (2018-05-03): Jason Snell:

Fears of the iPhone X having weak sales were stoked by reports that Apple had cut its orders of components that it uses in the iPhone X, including flexible OLED screens from Samsung. But Apple said that the iPhone X remained the top selling iPhone in its product line for every single week of the March quarter, and while sales were up slightly, revenue was up quite a bit.


Also interesting: iPhone ASP dropped from the holiday quarter. That would seem to suggest that the mix of iPhones being bought last quarter was tilted more toward the iPhone X than this quarter. It makes me suspect that perhaps initial demand for the iPhone X was so high that it made Apple think it would be a somewhat larger percentage of the iPhone product mix overall, so it cranked up iPhone X production. But the lower ASP’s in the fiscal second quarter suggest that perhaps the iPhone X is a smaller part of the whole than it was right out of the gate. That could lead to Apple having some more iPhones than they were able to sell right away, which would lead to a reduction in supply orders.


Apple announced a net profit of $13.8 billion ($2.73 per diluted share) on revenues of $61.1 billion, a figure in line with analyst expectations. The company’s revenues were up 16% compared to the year-ago quarter (see “Apple’s Q2 2017 Financial Results Show Slight Growth,” 2 May 2017). Apple CEO Tim Cook noted that this was Apple’s sixth consecutive quarter of accelerating revenue growth.

Update (2018-05-04): Horace Dediu:

Analysts could have been deceived because Apple purchased components early aggressively and then cut orders abruptly. The evidence is in inventories rising. This may have been strategic: denying competitor access to capacity; or an error.

Walt Mossberg:

And here’s the chart showing iPhone global dominance in the quarter. Note the iPhone dominance with multiple models.

Update (2018-08-23): Matthew Panzarino:

Remarkable how the narrative went from ‘iPhone X is a dud, they’re gonna cancel it’ to ‘it was so successful almost everyone bought it’

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