WRALtechwire.com logo

Apple's guidance hints at next-gen iPhone release

Apple

Aug, 2 2017, 12:26 PM

Editor's note: Apple grows revenue in all segments in 2Q17, and its guidance hints at the next-gen iPhone release, says Technology Business Research Analyst Daniel Callahan.

HAMPTON, N.H. - Apple reported Tuesday that it expanded its revenue to $45.4 billion in 2Q17, a 7.2% increase year-to-year.

Unsurprisingly, the iPhone delivered the majority of revenue at $24.8 billion, a 3.3% year-to-year growth for the typically soft quarter.

Apple noted that rumors swirling about the next iteration of the iPhone have slowed sales, but Apple posted growth in the segment regardless.

TBR records the iPhone’s average selling price increasing 1.7% year-to-year to $606, which Apple CEO Tim Cook noted was due to consistent demand for higher-end iPhones. Apple’s 3Q17 guidance of $49 billion to $52 billion puts into question the cadence of the next-gen iPhone release.

TBR expects that the iPhone 8 may surface in calendar 3Q17, but be of limited supply due to component supply constraints.

TBR expects calendar 4Q17 to gain most of the revenue from the next-generation iPhone.

Other standouts include Apple’s services, which grew 21.6% year-to-year to $7.3 billion, or 16% of revenue (up from 14.1% of revenue in 2Q16).

TBR believes services are critical for Apple to further monetize the huge number of iPhone units it sells, as well as diversify its revenue stream. Cook noted that its services business has grown to match that of a Fortune 100 company, a growth the company itself is surprised by.

TBR believes Apple’s expansion is due in part to the company’s efforts to customize services for different regions, such as North America, Europe, MEA, India and China, to deliver the best-in-class services it prides itself on.

The Mac business also grew 6.7% year-to-year to $5.3 billion, a respectable increase in growth in a competitive and contracting PC market.

(C) TBR





Menu