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Tim Cook talks about 5G, Apple services and financial results

After the financial conference for the first fiscal quarter of 2020, Tim Cook and Luca Maestri spoke to journalists. Among the topics covered were 5G, services and much more.

Tim cook

Apple posted record sales of $ 91.8 billion, with a profit of $ 22.2 billion in the first fiscal quarter of 2020.

In terms of figures, Apple announced:

  • iPhone: $ 55.96 billion in revenue, or + 7.66%compared to 2018
  • iPad: $ 5.98 billion in revenue down-11.1%
  • Mac: $ 7.16 billion, down from-3.5%
  • Apple Watch and other accessories: $ 10.01 billion, an increase of + 38.2%
  • Services (iCloud, Apple Music, App Store): $ 12.72 billion, up+ 10.3%

Globally, iPhone sales increased more than $ 400 million in China compared to last year, while a decrease of $ 600 million was recorded in Japan (but 6 of the 7 best-selling smartphones were iPhone). Growth in the United States has reached approximately $ 4.5 billion. Three of the four best-selling smartphones in China during the quarter were iPhones. Apple has also increased its research and development expenses to a record level that has never been reached in the past.

In China, Apple achieved revenue of $ 13.58 billion in the quarter, up from $ 13.17 billion last year (+ 3.1% year-on-year). China?s revenues represented 14.8% of Apple?s total revenues in the first quarter of fiscal 2020.

As for the iPhone, Tim Cook reports that the iPhone 11 was the top-selling model in each week of the quarter ending in December. The top three selling devices were the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max.

The world's iPhone installation base is the highest of all time, increasing week by week. 84% of business customers plan to buy an iPhone in the next quarter.

Services increased 17% year over year, with a quarterly record for the App Store and Apple Care. Apple News now has 100 million users per month. Revenues and transactions from Apple Pay more than doubled from the previous year, with a total of 15 billion in 2019. Tim Cook described the first months of Apple TV + as ?exciting? for the number of users and customer satisfaction. More than 418 million paid subscriptions have been registered on all platforms, including the App Store, up to 120 million more year on year. The goal is to reach $ 600 million by the end of the year. Tim Cook ruled out that advertising could never come to Apple TV + to lower subscription prices.

Apple?s portable devices alone are Fortune 150-sized in sales. The Apple Watch posted record revenues and more than 75% of purchases were made by new users who had never bought from Apple Watch. In total, wearable growth reached 44% over one year. Tim Cook: I think that with every Apple product purchased by a customer, you are strengthening the whole ecosystem, because that?s why they buy this device.

Tim Cook confirmed that Apple was having trouble keeping up with demand for AirPods and Apple Watch Series 3 during the Christmas holiday quarter. Before we start production, we have estimates, but demand may exceed our expectations. In the coming weeks, production should return to full capacity.The high demand for Apple Watch Series 3 is due to the offers and promotions offered by Apple.

The Mac Pro has received a strong response from the professional community in various sectors. Apple Stores posted double-digit growth in iPhone sales.

For the first time, revenues from portable devices (AirPods, Beats, Apple Watch) exceeded those of Macs.

Luca Maestri says Apple?s tax rate is 14.2% and the deal with Qualcomm to supply 5G chips will not have a big impact on revenue. 100% of Fortune 500 healthcare companies use Apple technologies.

On 5G, Tim Cook said it was an area of ??interest for Apple, but made no statement on future iPhones: We're not commenting on future products, so I'm trying to dodge the question a bit on the next iPhone. As for 5G, I think we are in the early stages of global distribution. Obviously, we couldn't be more proud of our training in this area and we are also very excited about our pipeline. Higher prices? I do not comment on this question.

For AR, the CEO of Apple confirmed that in the future, there will be more and more consumer applications, but also business: There are rarely any key new technologies for both segments. The two sectors will go hand in hand.