Apple has announced results for its fiscal 2014 first quarter, which ended December 28, 2013.
Prior to announcing the results, the guidance issued by Apple hinted at revenues between $55-58 billion with gross margins between 36.5 percent and 37.5 percent. In the previous quarter, Apple brought in $57.6 billion in revenue as opposed to $54.6 billion in the year-ago quarter. This translates into $13.1 billion in net profit as compared to the same net profit, in the same year-ago quarter. Earnings per diluted share stand at $14.50 this time, up from $13.87 in the past. Gross margin dipped nominally, down to 37.9 percent as opposed to 38. 6 percent in the year-ago quarter.
Unit sales of mobile devices established new records. Apple has sold over 472.3 million smartphones to date, with 51 million iPhones being sold in the previous quarter alone, in the same time period last year this figure was at 47.8 million. Apple also sold the most iPads this past quarter, establishing a new record with 26 million units being sold as opposed to 22.86 million from last year. Mac sales climbed from 4.06 million to 4.8 million. The iPod division of Apple’s hardware business didn’t perform too spectacularly, posting a 52 percent decline year-over-year. Apple only managed to sell six million iPods, which contributed just $973 million to its $57.6 billion revenue. The decline can simply be attributed to cannibalization by the iPhone, the smartphone is more than capable of giving customers their daily music fix, and as more users turn towards streaming services, the iPhone gives them constant access even if no Wi-Fi network is available. The success of Apple’s latest iPhones and iPads can’t be judged from last quarter’s unit sales, given the fact that the new iPads were released when the better part of the quarter had already been over, the iPhones too were launched quite a while after the quarter had begun and supply constraints kept them out of prospective customers’ hands for weeks.
Guidance for the fiscal 2014 second quarter predicts revenue between $42 billion and $44 billion, with gross margin between 37 and 38 percent. At this rate, the company will experience almost zero growth as opposed to fiscal 2013 second quarter, despite that this will be the first full quarter of the new iPhones availability on the world’s largest mobile carrier. The bitter truth to be taken from these results is that the iPod might now be heading off in the sunset, even if it was the product that kickstarted this revolution back in 2001.