Apple posts a record June quarter thanks to iPhone sales

More than 14 years after they were first introduced, iPhones are still very much in demand. Apple on Tuesday announced a massive earnings beat for the three months ended June 26, thanks to a nearly 50% year-over-year jump in iPhone sales to $39.6 billion. The company posted total quarterly revenue increased 36% to $81.4 billion — a record for the June quarter and nearly $8 billion above analyst expectations. “This quarter, our teams built on a period of unmatched innovation by sharing powerful new products with our users, at a time when using technology to connect people everywhere has never been more important,” Apple CEO Tim Cook said in a statement. The June quarter is typically Apple’s slowest time of year and some analysts had worried, leading up to the report, that the company would face tough year-over-year comparisons for hardware sales because the pandemic was driving strong demand for Macs and iPads this time last year. Others were concerned that the global chip shortage could cause a slowdown in sales of Apple products. But Apple’s results suggest it’s still going strong even as the Covid-19 conditions have improved in many parts of the world. The company posted double-digit revenue growth in each of its product categories. During the quarter, Apple announced a redesigned iMac and new iPad Pro, both made with Apple’s in-house M1 chip. Although the new iMac design was controversial, Cook said during Tuesday’s earnings call that the new product helped push Mac revenue to a June quarter record. CFO Luca Maestri added that the last four quarters have been the best ever for Mac sales, thanks to the success of the M1 chip. “Apple reported another solid quarter, highlighting the durability of the company’s brand,” Jesse Cohen, senior analyst at Investing.com, said in an email. “IPhones were the biggest driver of growth, suggesting consumers are continuing to upgrade to 5G.” Apple may also have been helped by a greater portion of its customers opting to buy the higher-end versions of the iPhone 12, Apple’s first-ever 5G phone that was introduced last fall. Services, an area of Apple’s business that’s become increasingly important in recent years, also posted strong growth during the quarter. With nearly $17.5 billion in quarterly sales, services generated the second highest revenue of any product category behind the iPhone. On Tuesday’s earnings call, Apple executives declined to provide revenue guidance for the September quarter, but said they expect a slower revenue growth rate than during the June quarter, due to foreign exchange impacts and supply constraints affecting iPhone and iPad. Maestri also said the year-over-year growth rate for services would likely slow after the June quarter rate benefited from a comparison to last year’s dip in services sales because of the pandemic. Apple’s stock fell more than 2% in after-hours trading following the results. As Apple’s business continues to boom even as the broader economy has been bumpy, the company has faced growing regulatory scrutiny that could throw a wrench into its business. House lawmakers last month proposed a slate of antitrust bills that, if passed, could seriously disrupt Apple’s business model and those of other tech giants. In particular, one proposed bill could harm Apple’s ability to collect a 30% commission from developers on all in-app purchases on its operating system — a practice also at issue in an ongoing legal battle between Apple and video game developer Epic. Another could open the door for third-party app stores on the iPhone.