A few days ago, Apple released the results for its 2022 fiscal third quarter (which ran from March 27, 2022, to June 25, 2022) and held a call with analysts to discuss the results. This is typically not a big fiscal quarter for Apple; the important quarter for Apple every year is the first fiscal quarter (containing the holiday sales season). But of course, every year is different. Two years ago, with so many people buying laptops and other Apple products as they worked from home during the pandemic, Apple had a great fiscal third quarter. Three months ago, Apple warned that the 2022 fiscal third quarter could be limited by a number of factors, especially supply constraints caused by COVID-related disruptions, and Apple said that this would likely result in third quarter revenue being $4 to $8 billion less than it otherwise would have been. But a few days ago, Apple said that the negative impact turned out to be slightly below $4 billion. As a result, Apple reported revenue of $83 billion for this past quarter, which Apple said was better than it expected and was an all-time record for the third fiscal quarter and up from the $81.4 billion in revenue for this same quarter one year ago. Apple CEO Tim Cook said that “supply constraints were less than we anticipated at the beginning of the quarter, coming in slightly below the range we discussed during our last call.” If you want to get all of the nitty-gritty details, you can listen to the audio from the announcement conference call on the Apple website, or you can read a transcript of the call prepared by Jason Snell of Six Colors. Apple’s official press release is here. Here are the items that stood out to me.
- Apple’s iPhone revenue for the quarter was $40.67 billion, up 3% from $39.57 billion this time last year.
- Cook said that Apple set a fiscal third quarter record for both revenue and switchers to the iPhone.
- Cook noted that Apple is now celebrating the 15th anniversary of the iPhone.
- Cook said that Apple is seeing a growth in iPhone sales in some places where there is currently a low percentage of iPhone users, such as Indonesia, Vietnam, and India.
- iPad revenue was $7.22 billion, down 2% from $7.37 this time last year.
- Cook said that iPad saw strong demand during the quarter. Because supply was so constrained, in large part because of factory shutdowns in China due to COVID outbreaks, Cook said that Apple does not know how high the demand might have been.
- Apple CFO Luca Maestri added that both supply constrains and negative foreign exchange had an impact on iPad revenue.
- Maestri also noted that “the iPad installed base reached a new all-time high with over half of the customers during the quarter being new to the product.” It is interesting to see so many new customers to a product like the iPad that has been around since 2010.
- Maestri said that over two-thirds of the people who purchased an Apple Watch during the past quarter were purchasing their first Apple Watch.
- Cook said that in its “two and a half years since launch, Apple TV+ has now earned 250 wins and over 1100 award nominations and counting.”
- Cook also mentioned Apple’s commitment to an industry-wide effort to get rid of passwords. “Last month, we announced the introduction of Passkey, a next-generation credential that’s intended to replace passwords. A Passkey can’t be phished, nor can it be stolen by hackers in a data breach, because the information is stored on your device and your device alone. “