How Apple just became the most profitable company on Earth
Find out how Apple made $18 billion in only three months
Apple has recorded a profit of $18 billion for the past three months, making it not only the most successful quarter in the company’s history, but the largest quarterly profit posted by any company. Ever.
The company racked up the record breaking profits largely because of stellar Christmas sales of the iPhone. Apple sold 74.5 million iPhones during the quarter, up from 51 million in the same quarter last year. The huge year-on-year increase in sales comes despite the fact the iPhone 6 and 6 Plus are significantly more expensive than their predecessors, a rejoinder to those who claimed Apple would have to make cheaper handsets to compete with the influx of low-cost Android and Windows Phone smartphones.
Mac sales also hit a record high, with the company selling just over 5.5 million units during the quarter. Ominously for Apple’s competitors, the company is expected to announce a revamp of its MacBook Air line-up in the coming weeks, with speculation that a 12in model is in the offing.
CEO Tim Cook also confirmed that the Apple Watch will go on sale in April, almost certainly giving Apple’s profits another boost. Cook said that he was already wearing the device every day and “can’t live without it”, although it may be wise to wait for a slightly more impartial review before placing your pre-order. The Apple CEO said that there was already a large number of developers creating apps for the Watch, which was announced last autumn.
It wasn’t all upward trend lines in Apple’s financials. Sales of the iPad slumped alarmingly, down 18% year-on-year to just over 21 million units. The results provide further evidence that consumers are now using the phablet-sized smartphones, such as the iPhone 6 Plus, instead of tablets such as the iPad mini. However, Cook said he remained confident in the long-term future of the iPad, whilst admitting he didn’t expect to see any significant increase in tablet sales over the next six months.
Too rich?
The world-beating profits further enlarge Apple’s already enormous cash pile. The company is now sitting on $178 billion of cash – which is enough to buy Intel outright or, as one analyst noted, give every single American more than $500.
What Apple will do with all that money remains a pertinent question. It spent $3bn acquiring Beats Electronics last year, but Apple doesn’t make a habit of lavish acquisitions. It may return some of the money to shareholders in the form of a dividend or buy back more of its own stock. Whatever, it’s come a hell of a long way from the company that almost went bankrupt before the launch of the iMac in the mid-1990s.
