Apple’s first quarter of 2020 was its best ever

Apple had its best quarterly performance in the first quarter of 2020.

The first quarter of 2020 was Apple’s best ever with the highest revenue it has ever generated in a quarter. Compared to the same period last year, the revenue of Apple Inc rose 9% this year during the first quarter rising to $91.8 billion. Apple’s quarterly earnings per diluted share also reached $4.99; another record for the company. Around 61% of the company’s revenue for the first quarter came from international sales. 

According to Apple CEO Tim Cook, it was the highest quarterly revenue ever. Apart from strong demand for iPhone 11 and iPhone 11 pro, the main factors driving higher sales and revenue were all time records for services and wearables. Apple’s active installed base of devices grew during the holiday quarter in each of its geographic segments and has reached 1.5 billion. Apple sees it as a proof of high customer satisfaction, customer engagement and loyalty of its customers which are driving higher growth across the board. 

According to Apple CFO Luca Maestri, Apple’s very strong business performance drove an all-time net income record of $22.2 billion and generated operating cash flow of $30.5 billion. The company has returned around $25 billion to shareholders including $20 billion in share repurchases and $3.5 billion in dividends and equivalents, as Apple maintains its target of reaching a net cash neutral position over time. 

Apple has offered the following guidance for the second quarter of 2020:

  • Net revenue between $63.0 billion and $67.0 billion
  • gross margin between 38.0 percent and 39.0 percent
  • operating expenses of around $9.6 billion to $9.7 billion
  • other income/(expense) of $250 million
  • tax rate of 16.5 percent (approx.)

However, Apple annunced later in a press release with an investor update that the company might not be able to achieve the expected results becauase of the Coronavirus outbreak. Worldwide iPhone supply was going to be temporarily constrained according to the press release. While Apple’s iphone manufacturing partner sites are located outside the Hubei province (under lockdown) and have reopened, they are ramping up slower than anticipated. Customer demand has also reduced in China as Apple stores and partner brand stores remain closed. The ones that are open are seeing lesser traffic.

 Q1 2020Q1 2019
Products$79,104$73,435
Services$12,715$10,875
Total Net Sales$91,819$84,310
 Q1 2020Q1 2019
iPhone$55,957  $51,982
Mac$7,160$7,416
iPad$5,977$6,729
Wearables, Home and Accessories$10,010$7,308
Services$12,715$10,875
Total Net Sales$91,819$84,310

Sources: Apple q1 2020 results. 

APPLE Revenue by Product Category

Net Revenue of Apple by Product Category 2017-2019

Amounts are in $ millions.

Product2019.2018.2017.
 iPhone$142,381 $164,888$139,337
Mac $25,740 $25,198 $25,569 
iPad $21,280 $18,380 $18,802 
Wearables, Home and Accessories $24,482 $17,381 $12,826 
Services $46,291 $39,748 $32,700 
Total Net Sales $260,174$265,595 $229,234 

Apple’s iPhone generates the highest revenue for the company accounting for more than half of total sales each year. In 2019, the net revenue of Apple from the iPhone declined compared to the previous year but revenue from services and wearables gained significantly.

Apple Revenue from Services

Revenue of Apple Inc from Services 2013-2019

Amounts are in $millions.

YearServices Revenue ($mn)
2019$46,291
2018$39,748
2017$32,700
2016$24,348
2015$19,909
2014$18,063
2013$16,051

 Apple’s revenue from the sales of services has grown fast during the past few years. From 2018 to 2019, there was an increase of 16% in Apple’s net revenue from services. In fiscal 2019, Apple generated $46.3 billion from services compared to $39.75 billion in 2018. The revenue from services was around 17.8% of the net revenue of the brand in 2019.

Apple Inc Revenue from Sales of Mac

Revenue of Apple Inc from Mac Sales 2005-2019

Amounts are in $ millions.

YearMac Net Sales ($M)
2019$25,740 
2018$25,198 
2017$25,850 
2016$22,831 
2015$25,471 
2014$24,019 
2013$21,483 
2012$23,221 
2011$21,783 
2010$17,479 
2009$13,859 
2008$14,354 
2007$10,314 
2006$7,375 
2005$6,275 

There was a 2% growth in net sales of Mac in 2019 compared to 2018. Revenue of Apple Inc from Mac sales grew to $25.7 billion in 2019 compared to $25.2 billion in 2018. Growth in net revenue from Mac was driven primarily by higher net sales of Macbook Air.

Apple Inc Number of Employees

Number of Employees at Apple Inc 2000-2019

YearEmployees
2019137,000
2018132,000
2017123,000
2016116,000
2015110,000
201492,600
201380,300
201272,800
201160,400
201046,600
200934,300
200832,000
200721,600
200617,787
200514,800
200411,695
200310,912
200210,211
20019,603
20008,568

In 2019, the number of full time equivalent employees at Apple Inc grew to 137,000 compared to 132,000 in 2018.

Apple Research and development expenses (quarterly)

Research & Development (R&D) Costs of Apple Inc. 2015- 2019.

Apple is a leading technology company with a strong persence in the computing and smartphone industry. As the level of competition in the technology industry has grown, so has the focus of brands on research and innovation. Technology giants including Apple are investing billions in the development of new products and services. Find out from the tables below how much Apple invested each quarter in R&D from 2015 to the most recent quarter of 2019. 

FY2015R&D Costs (Millions)
Q1 $1,895
Q2 $1,918
Q3 $2,034
Q4$2,220 
Total $8,067
FY2016R&D Costs (Millions)
 Q1 $2,404
Q2  $2,511
 Q3$2,560
 Q4 $2,570
 Total $10,045
FY2017R&D Costs (millions)
Q1 $2,871
Q2 $2,776
Q3 $2,937
Q4$2,997
Total $11,581 
FY2018R&D Costs (Millions)
 Q1 $3,407
 Q2 $3,378
 Q3 $3,701
 Q4 $3,750
 Total $14,236 
FY2019R&D Costs (millions)
 Q1 $3,902
 Q2 $3,948
 Q3 $4,257
Q4  $4,110
 Total $16,217

Apple R&D Expenses 2018 v 2019.

During the first three quarters of 2019, the research and development expenses of Apple Inc grew by around 15% compared to the last year. Nine months ended June 29, 2019, Apple’s R&D expenses were $12.1 billion compared to $10.5 billion during the same period in 2018. Total research and development expenses of Apple Inc were around 14% higher for the fiscal 2019 compared to last year. In 2019, Apple Inc spent $16.22 billion on research and development compared to $14.24 billion in 2018.

Apple is a leading brand of computing products and smartphone devices. Apart from them, it also manufactures and sells a large range of related software, services, accessories, and third-party digital content and applications. Its range of products and services includes iPhone, iPad, Mac, Apple Watch, AirPods, Apple TV, HomePod, a portfolio of consumer and professional software applications, iOS, macOS, watchOS and tvOS operating systems, iCloud, Apple Pay and more accessories, services and support offerings. Apple also sells and delivers digital content and applications through the iTunes Store, App Store, Mac App Store, TV App Store, Book Store, and Apple Music. The company uses a mix of direct and indirect distribution channels for the sales of its products. In 2018, it achieved 29% of its sales through direct channels and 71% through the indirect channels. Net sales of the company in FY2018 reached 265.6 Billion dollars and Net Income 59.5 billion dollars. 

Apple Revenue by Geographical segments (quarterly)

Apple Inc Quarterly Geographic Revenue 2015-2019.

Apple’s business is divided into five geographic segments that include the Americas, Europe, Greater China, Japan and Rest of Asia Pacific. Americas have remained the biggest market of Apple and its largest source of revenue accounting for more than 40% of its revenue consistently for several years.

Geographical Revenue 2019.

Apple’s revenue from the Americas grew by around 4% in 2019 compared to 2018. In 2019, the Americas accounted for $116.9 billion in revenue compared to $112.1 billion in 2018. Apple’s revenue from Japan, Greater China and Europe decline in 2019 compared to the previous year. Apple’s revenue from Europe came down to $60.3 billion in 2018 as compared to $62.4 billion in 2018. Revenue from Japan in 2019 came down to $21.5 billion compared to  $21.7 billion in 2018. In Greater China, Apple’s revenue decline by around 16% in 2019 compared to the previous year. Apple’s revenue from Greater China came down to $43.68 billion in 2019 from $51.9 billion in 2018.  Its revenue form the rest of Asia Pacific grew slightly rising from $17.4 billion in 2018 to $17.8 billion in 2019.

Geographical Revenue 2018.

The Americas generated more than $112.1 Billion in revenue in 2018, an increase of more than 15 billion dollars over the previous year. Americas are followed by Europe and Greater China as the largest source of revenue for Apple Inc. Apple’s revenue from Europe for FY2018 was $62.4 Billion which was around $7.5 billion higher than the previous year. Greater China generated around $51.9 Billion and Japan around $21.7 Billion and the rest of Asia Pacific around $17.4 Billion.  Apple’s consolidated net sales in 2018 were $265.6 Billion and $229.2 Billion in 2017.

Check out the revenue of Apple from major geographical segments for each quarter from 2015 to 2019

(Amounts in millions).

Geographical segment – (Americas)Revenues (Millions)
Q1 FY2015$30,566
Q2 FY2015$21,316
Q3 FY2015$20,209
Q4 FY2015$21,773
Q1 FY2016$29,325
Q2 FY2016$19,096
Q3 FY2016$17,963
Q4 FY2016$20,229
Q1 FY2017$31,968
Q2 FY2017 $21,157
 Q3 FY2017 $20,376
 Q4 FY2017 $23,099
Q1 FY2018  $35,193
 Q2 FY2018 $24,841
 Q3 FY 2018 $24,542
Q4 FY2018 $27,517 
 Q1 FY2019 $36,940
Q2 2019$ 25,596
Q3 2019$25,056
Q4 2019$29,322

 Geographical segment Europe

EuropeRevenues (Millions)
Q1 FY2015$17,214
Q2 FY2015$12,204
Q3 FY2015$10,342
Q4 FY2015$10,577
Q1 FY2016$17,932
Q2 FY2016$11,535
Q3 FY2016$9,643
Q4 FY2016$10,842
Q1 FY2017$18,521
Q2 FY2017 $12,733
 Q3 FY2017 $10,675
 Q4 FY2017 $13,009
 Q1 FY2018 $21,054
 Q2 FY2018 $13,846
 Q3 FY2018 $12,138
Q4 FY2018  $15,382
 Q1 FY2019 $20,363
Q2 2019$13,054
Q3 2019$11,925
Q4 2019$14,946

Geographic segment Greater China

Greater ChinaRevenues (Millions)
Q1 FY2015 $16,144
Q2 FY2015 $16,823
Q3 FY2015$13,230
Q4 FY2015$12,518
Q1 FY2016$18,373
Q2 FY2016$12,486
Q3 FY2016$8,848
Q4 FY2016$8,785
Q1 FY2017 $16,233
Q2 FY2017 $10,726
 Q3 FY2017 $8,004
 Q4 FY2017 $9,801
 Q1 FY2018 $17,956
 Q2 FY2018 $13,024
 Q3 FY2018 $9,551
Q4 FY2018  $11,411
 Q1 FY2019 $13,169
Q2 2019$10,218
Q3 2019$9,157
Q4 2019$11,134
JapanRevenues (Millions)
Q1 FY2015$5,448 
Q2 FY2015 $3,457
Q3 FY2015 $2,872
Q4 FY2015 $3,929
Q1 FY2016 $4,794
Q2 FY2016 $4,281
Q3 FY2016 $3,529
Q4 FY2016 $4,324
Q1 FY2017 $5,766
Q2 FY2017 $4,485
 Q3 FY2017 $3,624
 Q4 FY2017 $3,858
 Q1 FY2018 $7,237
 Q2 FY2018 $5,468
 Q3 FY2018 $3,867
Q4 FY2018  $5,161
 Q1 FY2019 $6,910
Q2 2019$5,532
Q3 2019$4,082
Q4 2019$4,982
Rest of Asia PacificRevenues (Millions)
Q1 FY2015 $5,227
Q2 FY2015 $4,210
Q3 FY2015 $2,952
Q4 FY2015 $2,704
Q1 FY2016 $5,448
Q2 FY2016 $3,159
Q3 FY2016 $2,375
Q4 FY2016 $2,672
Q1 FY2017 $5,863
Q2 FY2017 $3,795
 Q3 FY2017 $2,729
 Q4 FY2017 $2,812
 Q1 FY2018 $6,853
 Q2 FY2018 $3,958
 Q3 FY2018 $3,167
Q4 FY2018  $3,429
 Q1 FY2019 $6,928
Q2 2019$3,615
Q3 2019$3,589
Q4 2019$3,656
  • Apple is a leading brand of computing products and smartphone devices. Apart from them, it also manufactures and sells a large range of related software, services, accessories, and third-party digital content and applications. Its range of products and services includes iPhone, iPad, Mac, Apple Watch, AirPods, Apple TV, HomePod, a portfolio of consumer and professional software applications, iOS, macOS, watchOS and tvOS operating systems, iCloud, Apple Pay and more accessories, services and support offerings. Apple also sells and delivers digital content and applications through iTunes Store, App Store, Mac App Store, TV App Store, Book Store, and Apple Music. The company uses a mix of direct and indirect distribution channels for the sales of its products. In 2018, it achieved 29% of its sales through direct channels and 71% through the indirect channels. Net sales of the company in FY2018 reached $265.6 Billion and Net Income $59.5 billion.
  • Apple Quarterly Financial Reports and form 10K (2015-2019).

Apple Iphone sales and revenue 2015 to 2019 (quarterly)

Net Sales of Iphone 2015-2019.

Iphone is the leading product from the house of Apple. For several years consistently, it has remained the biggest source of revenue for the brand accounting for more than 60% of its net sales.  Apple has steadily been improving its iphone both in terms of technology and aesthetic appeal. In 2017 and 2018, the company was able to achieve impressive iPhone sales. However, 2019 opened on a slightly weaker note. In light of the financial results of q1 2019, Apple revised its revenue guidance for the second quarter to between $55 billion and $59 billion and managed to achieve $58 billion in net sales in the 2nd quarter. In the 3rd and 4th quarters respectively Apple generated $53.8 and $64 billion in net sales. iPhone sales improved with the release of the iPhone 11. However, the company’s net revenue from iPhone still remained lower than the previous year. Total revenue from iPhone was $164.9 billion in 2018 which came down to $142.4 billion in 2019.

Competition in the smartphone industry has grown a lot and the number of smartphones in the premium segent has also increased. Apple invests a lot in research and innovation every year and the iPhone has continued to grow into a more robust and attractive phone with each passing year. Iphone Xs and Xr are loaded with several mind-blowing features. The release of iPhone 11 during the fourth quarter has led to growth in sales.

However, lower net sales in q1 2019 left investors worried. Apart from the high competition and pricing, Tim Cook cited a slew of factors affecting iPhone sales around the world. People are not upgrading to the latest models as quick as they once used to. According to Tim Cook, there are many factors that led to lower sales in the first quarter of fiscal 2019. The rising trade tensions between U.S. and China are also a reason that sales of iPhone in China is affected. However, the picture is bright at points and Apple is also focusing on other products and services apart from iPhones.

Apple CEO Tim Cook noted, “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.” Apple is still strong and iPhone as attractive as ever. 

Unit sales of iPhone and revenues 2015-2019 (quarterly data in $millions).

FY2015Units SoldNet Sales (Millions)
Q174,468 $51,182
Q261,170 $40,282
Q347,534 $31,368
Q448,046$32,209
Total 231,218 $ 155,041
FY2016Units soldNet sales in millions
Q174,779$51,635 
Q251,193 $32,857
Q340,399 $24,048
Q445,513$28,160
Total211,884 136,700
FY2017/quarterIphone Units soldNet sales in millions
Q178,290 $54,378
Q250,763 $33,249
Q341,026$24,846
Q446,677 $28,846
Total 216,756 $ 141,319

 Apple reclassified its revenues for 2018 in connection with the adoption of the new revenue accounting standard.

FY2018/QuarterIphone units soldNet sales in millions.
Q177,316$61,104
Q252,217 $37,559
Q341,300 $29,470
Q446,889 $36,755
Total217,722 $164,888 
FY2019iPhone Net sales in millions.
Q1$ 51,982
 Q2$ 31,051
Q3$25,986
Q4$33,362
Total$142,381

iPhone sales were the strongest in 2015. In 2014, Apple achieved net sales of 169,219 iPhone units which grew to 231,218 in 2015, the highest number of iPhone units Apple has ever sold in an year till now.  Since then, Apple iPhone sales were the best in the fiscal 2018, having grown by 18% compared to 2017. The total number of units sold was only 217,722 but the revenue from the sales of iPhone was the highest till date at $164.9 Billion.  Even in 2015, when Apple had achieved the highest unit sales, the total revenue for the fiscal year from iPhones was only $155 Billion. Consolidated Net sales for the year 2018 were $265.6 Billion.

Every year, the first quarter has been the strongest for Apple. However, the scenario was different in 2019. Net sales of iPhones (in q1)  returned to the 2015-16 levels. Compared to the same period last year, Apple’s net sales of iPhone remained around $9 Billion lower. It showed net sales would remain lower in fiscal 2019 compared to 2018. Even if iPhone sales were not totally disappointing, they remained lower than expectations in the first quarter of 2019. Again in the second quarter, revenue from iPhone sales was $6.5 billion less than the same quarter previous year, having fallen from $37.56 billion in the second quarter of 2018 to $31.05 billion during the same period in 2019. During the third and fourth quarters as well Apple’s revenue from iPhone remained lower compared to the previous year. Apple’s net revenue from iPhone during the fiscal 2019 came down to $142.4 billion compared to $164.9 billion in 2018; yoy decline of 14%. Total revenue of the organization for 2019 was $260.2 billion against $265.6 billion in 2018; yoy decline of 2%.