Apple Inc recently released its quarterly results for the 3rd quarter of 2015 (3Q2015). Being the most valuable company in the world, coupled with its immense influence on consumers’ behavior, Apple’s results can tell us a lot about the direction in which the world is heading.
Here are some of our thoughts about the trend of the world that we derive from Apple’s results.
Revenue from iPhone and Mac
(Source: Apple)
Apple sold 47.5 million iPhones units during the third-quarter of 2015. On a year-on-year basis, this is about a 35% increase in number of iPhones units sold compared to the same time last year.
More interestingly is the fact that Apple’s sales revenue from iPhone has increased by 59% despite sales only increasing by 35%. What that means is that Apple is not only able to sell more units of iPhone, but is also able to sell them at a higher price. It shows that Apple’s customers are not only loyal to the brand, but that their demand for the iPhone is also price inelastic – they will still buy the iPhone when the price increases.
The same cannot be said about the Mac, where a 9% growth in sales translates exactly into an additional 9% increase in revenue.
The China Growth Story
(Source: Apple)
For the last few years, people have been talking about the rate at which China is growing and how they will be the market leader for consumer demand in the future. A quick glance at Apple’s earnings report confirms that. The rate at which China is booming is just stunning.
Apple’s revenue in China for 3Q015 was US$13.2 billion, compared to US$6.2 billion as of 3Q2014. That represents a year-on-year increase of about 112%. China is currently the 2nd biggest market for Apple, surpassing even the whole of Europe.
If China can be the biggest market for Apple, a company that prides itself on originality and innovation, she just might be the biggest market for almost anything else in the world.
The next step ahead
It should come as no surprise that iPhone sales continue to form the bulk of Apple’s revenue. The current consumers behavior of changing phones once every 2 years is a factor that is going for the iPhone.
For now, the future of Apple continues to lie in the iPhone. Apple will continue to continue strengthen their share in the mobile phone market with continuous research and development for the iPhone.
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