APRIL 28 (Reuters) — Apple Inc beat Wall Street’s revenue and profit forecasts on Monday (April 27) as it sold more iPhones in China than the United States for the first time, but the company gave no sales figures for its new AppleWatch.
Apple’s iPhone sales in China soared, increasing its revenue in the country 71 percent to $16.8 billion, although that was helped by gift-buying for Chinese New Year.
“And for the first time in several quarters Mac sales are now higher than the iPad sales but it is the iPhone that continues to beat all expectations. Look at China, 71% increase, that’s just phenomenal so basically now the Chinese market has become more important than the US market and to a great extent the Chinese market is still untapped. It’s not a mature business, it’s a growth business,” Professor Arvind Bhambri, a strategy professor at the University of Southern California’s Marshall School of Business told Reuters.
In a conference call with reporters and investors following the earnings announcement, Chief Executive Tim Cook said that China’s expanding middle class is fuelling iPhone sales there, which is the bulk of the company’s sales. The iPhone 6 was launched last autumn in China with a number of carriers.
“When they expand the store footprint and they bring out more models we’re going to see the numbers accelerate even greater and there are still parts in Asia, including India, where Apple doesn’t yet have any significant penetration. So when we look at Asia broadly and we look at China and India, over the long-term Apple is going to do even bigger numbers in China and India than they did in the US,” Bhambri said.
Apple sold 61.2 million iPhones in the quarter, up 40 percent from the year-ago quarter, but down from the record-breaking holiday quarter. It sold 12.6 million iPads, down 23 percent from a year ago.
Apple’s big screen iPhone 6 and 6 Plus have been popular with customers world-wide, helping the company overtake rival Samsung in global smartphone sales last quarter.
The most valuable publicly traded U.S. Company raised its quarterly dividend 11 percent to 52 cents per share and boosted its share repurchase programme to $140 billion from $90 billion announced last year.
Together, Apple estimated that would mean returning $200 billion to shareholders by the end of March 2017. It ended the quarter with $193.5 billion in cash and marketable securities, up more than $15 billion from the last quarter.
“The street’s reaction was sort of fluctuated and at the end of the day sort of closed one percent up. And a lot of the investors are saying that Apple is the best investment they’ve made in recent years because there were so many questions when Tim Cook became the CEO about whether they’d be able to keep the momentum going and he has,” Professor Bhambri said.
Apple gave no sales figures for its recently released Apple Watch, but did say the current quarter was off to “an exciting start”.
“The iWatch is not going to do a lot in the next quarter, for two reasons. One, even though it is selling well for a new product relatively speaking the numbers of the iWatch are very small compared to the numbers of the iPhone. When you’re selling, when your revenues are 60 billion dollars in a quarter, even if you sell 2 million smart watches at 300 dollars or an average price of 500 dollars, it’s a drop in the bucket in the short-term,” Bhambri said.
Apple said it expected fiscal third-quarter revenue of $46 billion to $48 billion, in line with analysts’ average forecast of $47 billion.
