The strategy might seem risky but it has paid off. By increasing the prices of its iPhone, Apple has found the parade to the saturation of the smartphone market. And achieved a turnover and record profits during its fiscal year ended at the end of September. The company based in Cupertino (California) has, however, warned that its growth is expected to slow down during the holiday period, causing a fall in its action.
With its new range of products, presented in the last two months, Apple has not put a brake on the price increase. At the end of September, apple launched the iPhone XS Max, the smartphone the most expensive in its history – it is charged up to 1 659 euros in France. The new models of the iPad tablet Pro and MacBook Air, presented Wednesday, October 31, also display a price much higher than their predecessors.
On the fiscal year 2017-2018, the net profit of Apple rose to 59.5 billion ($52.1 billion euros), a jump of 23 % compared to the preceding twelve months. The turnover of the business has increased 16 %, to 266 billion dollars. In the fourth quarter, from July to September, it increased by 20 %, ” the highest growth rate in the past three years “, welcomes Tim Cook, the chief executive officer.
The main engine of growth
As often, the iPhone has been the main engine of growth. If the number of units sold has only increased slightly over the quarter, the turnover generated by the smartphone rose by 29 %, due to an average selling price of close to $ 800. The revenue from the services (App Store, Apple Music, etc.) have increased by 17 %, while close to 10 billion dollars. And those of other products (watches, housing tv…) of 31 %.
For the current quarter, a crucial period that includes the year-end holiday season, Apple expects revenue of between 89 and 93 billion dollars, i.e. a gain ranging from 1% to 5 % from 2017. The group justified his caution by the unfavourable evolution of the exchange rate, the economic uncertainties in several emerging countries, or of potential inventory problems.
In addition, Apple is going to undergo a reversal of the timetable for the launch of its iPhone : the past year, he had first marketed the cheapest model. The more expensive versions had been launched in October, leading to mechanically average selling price and revenue higher during the quarter of the holiday season.
Decline in stock
This warning did not please Wall Street, even as the action Apple had previously resisted better than the other values in the technology stock market correction. In exchange after Exchange, it dropped and 6.5 %. If the decline were to be confirmed Friday, in plenary, the group’s market capitalization could fall below the symbolic threshold crossed early August, 1000 billion dollars.
The markets have also disliked the announcement of a change in the publication of the results. Now, Apple does not share the more the number of iPhone, iPad and Macs sold every quarter. These figures, particularly observed by the investors, provided an overview of the demand for the products of the brand. They also allowed to deduct the average selling price of each category of products.
“The number of units sold is less relevant than in the past,” explains Luca Maestri, the chief financial officer of the company. “Usually, companies stop release figures when they begin to fall,” says Walter Piecyk, analyst at BTIG Research. This is not a good sign for Apple. “
