Apple‘s outgoing CEO Tim Cook recently highlighted record Q2 revenue on an earnings call, emphasised by a 28% increase in China. The news comes despite supply chain issues for iPhones and, to a lesser extent, Mac Minis.
Driven by demand for its iPhone 17 family of devices, Cook stated “customer enthusiasm for iPhone has been extraordinary, with revenue growing 22% year-over-year to achieve a March quarter record”.
Revenue for the iPhone totalled $56.9 billion, slightly below analysts’ estimates of $57.2 billion.
Greater China posted revenue of $20.4 billion to beat analysts’ forecast of $18.9 billion.
“We are thrilled with the performance in greater China”, Cook said. “If you look at the individual products, the iPhone was the top-selling model in urban China”.
Cook said the March supply constraints were primarily driven by the lack of advanced nodes its SOCs are produced on and not related to memory. He noted those constraints are continuing in the current quarter.
Service revenue of $30.9 billion hit an all-time high, up 16% from a year earlier. CFO Kevan Parekh said Apple’s installed base of over 2.5 billion active devices reached another all-time high.
Apple reported revenue of $111.1 billion, up 17% year over year, and above analyst expectations of $109.6 billion. Net income of $29.5 billion increased by 17%.
Reaction
PP Foresight analyst Paolo Pescatore told Mobile World Live (MWL) Apple’s Q2 shows “a company still benefitting from huge ecosystem strength, but one which is now facing a sharper strategic test”.
“The iPhone is still the front door, services are doing more of the heavy lifting, and Mac momentum points to wider opportunities across students, creators and productivity”, he explained. “China is a key swing factor, while supply constraints highlight the importance of flawless execution”.
He noted the bigger issue for Apple is implementing AI, which Cook touched on briefly by stating the company’s work with Google’s Gemini models is “going well” as is internal efforts to build its own foundational models.
“Apple must prove it can turn its installed base, hardware, software and services into a more intelligent, personalised experience, not just defend its ecosystem, but redefine it for the next phase of growth”, he said.
Ternus takes a turn
The Q2 call was the first since Apple announced on 20 April that Cook will be stepping down on 1 September 2026 when current SVP of hardware engineering John Ternus will take the helm. Cook will transition to an executive chair role.
“As I have said, there is no one on this planet I trust more to lead Apple into the future than John Ternus”, he said. Ternus returned the compliments to Cook, stating he “is one of the greatest business leaders of all time”.
“We have an incredible roadmap ahead, and while you’re not going to get me to talk about the details of that roadmap, suffice it to say this is the most exciting time in my 25-year career at Apple to be building products and services”, Ternus said.
Roger Entner, founder and analyst at Recon Analytics, told MWL “Cook is delivering rockstar numbers on his way out. John Ternus has big shoes to fill, especially with the looming economic crisis on the Far East and the kerosine shortages”.
Source: Mobile World Live
Image Credit: Apple
