TOPLINE Apple reported a profit of $23.6 billion in its second quarter, up twofold from a year ago, on record sales of $89.6 billion, blowing past analysts’ expectations as iPhone sales remained strong after a record end to 2020.



<h3 class="wp-block-heading" id="h-key-facts">KEY FACTS</h3>



<ul><li>Apple’s sales were up 53.7% jump from the same quarter last year, exceeding the $77.4 billion <a href="https://finance.yahoo.com/quote/AAPL/analysis?p=AAPL" target="_blank" rel="noreferrer noopener">expected by analysts</a>.</li></ul>



<ul><li>Net earnings were $1.40 per share, also well ahead of the consensus analyst expectation of 99 cents per share.</li></ul>



<ul><li>iPhone sales totaled $47.9 billion, accounting for 53% of Apple’s total revenue, far surpassing the $29 billion reported in the first quarter of 2020 and the $41.7 billion predicted by Wall Street analysts.</li></ul>



<ul><li>Revenue from services like iTunes and the App Store grew 27% to $16.9 billion, and sales of Mac computers, iPads and accessories like AirPods and watches also increased from last year.</li></ul>



<h3 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h3>



“Success was broadly distributed across our product categories,” Apple CEO Tim Cook said in a Wednesday evening conference call.



<h3 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h3>



In the final three months of last year, Apple logged the&nbsp;<a href="https://www.forbes.com/sites/johnkoetsier/2021/01/27/apples-biggest-quarter-ever-all-the-insane-numbers/">best quarter</a>&nbsp;in its 45-year history, topping $100 billion in total sales and growing revenue for&nbsp;<a href="https://www.cnbc.com/2021/01/27/apple-aapl-earnings-q1-2021.html" target="_blank" rel="noreferrer noopener">virtually every product line</a>. Over&nbsp;<a href="https://www.apple.com/newsroom/pdfs/q4fy15datasum.pdf" target="_blank" rel="noreferrer noopener">the last</a>&nbsp;<a href="https://www.apple.com/newsroom/pdfs/Q1FY17DataSummary.pdf" target="_blank" rel="noreferrer noopener">decade</a>, iPhones have served as the Cupertino, Calif.-based company’s largest driver of revenue. Some&nbsp;<a href="https://www.forbes.com/sites/timbajarin/2020/11/01/will-5g-kick-off-a-smartphone-upgrade-supercycle/?sh=9fcbe876fd2b">observers</a>&nbsp;expected iPhone sales to remain fairly strong at the start of this year, as consumers continue&nbsp;<a href="https://www.wsj.com/articles/apple-aapl-2q-earnings-report-2021-11619572929" target="_blank" rel="noreferrer noopener">upgrading to pricier</a>&nbsp;5G-enabled smartphones. But the company has also&nbsp;<a href="https://www.apple.com/newsroom/pdfs/Q1FY17DataSummary.pdf" target="_blank" rel="noreferrer noopener">rapidly</a>&nbsp;<a href="https://www.apple.com/newsroom/pdfs/FY21%20Q1%20Consolidated%20Financial%20Statements.pdf" target="_blank" rel="noreferrer noopener">increased</a>&nbsp;the share of its revenue from online services, and sales have grown for accessories like watches and AirPods.



<h3 class="wp-block-heading" id="h-tangent">TANGENT</h3>



It’s&nbsp;<a href="https://www.forbes.com/sites/chuckjones/2021/04/28/the-two-most-important-numbers-in-apples-earnings-announcement/?sh=6df247e93b49">not unusual</a>&nbsp;for Apple’s revenue to drop significantly from the end of one year to the beginning of the next, as holiday shopping brings&nbsp;<a href="https://www.apple.com/newsroom/2021/01/apple-reports-first-quarter-results/" target="_blank" rel="noreferrer noopener">consumers into stores</a>&nbsp;and drives&nbsp;<a href="https://www.cnbc.com/2021/01/06/apple-app-store-customers-spent-record-540-million-on-new-years-day.html#:~:text=On%20top%20of%20that%2C%20Apple,for%20its%20Apple%20Books%20app." target="_blank" rel="noreferrer noopener">digital sales</a>.



<h3 class="wp-block-heading" id="h-further-reading">FURTHER READING</h3>



<a href="https://www.forbes.com/sites/chuckjones/2021/04/28/the-two-most-important-numbers-in-apples-earnings-announcement/?sh=6df247e93b49">The Two Most Important Numbers In Apple’s Earnings Announcement (Forbes)</a>



By Joe Walsh, Forbes Staff

Apple_announce-iphone12pro_10132020

Apple Profit Doubles On Record Revenue In Second Quarter As iPhone Sales Beat Expectations

Apple hit a new milestone on Wednesday, becoming the first publicly traded U.S. company to reach a market capitalization of over $2 trillion and doubling in valuation over the last two years.



KEY FACTS



The iPhone maker’s stock is up almost 55% so far in 2020, and shares have rallied more than 106% since the market hit a low point amid the coronavirus recession on March 23 (compared to the benchmark S&amp;P 500’s gain of 51% over that period).



Now trading at nearly $470 per share, Apple’s stock is at an all-time high, and Wall Street analysts are still quite bullish that it can continue to rally: 61% give it a “buy” rating and 27% a “hold” rating, according to Bloomberg data.



Apple’s market cap now eclipses that of other U.S. tech giants, including Microsoft ($1.7 trillion), Amazon ($1.6 trillion), Google parent Alphabet ($1.1 trillion) and Facebook ($761 billion).



Apple was also the first U.S. company to reach a $1 trillion market cap, which it did just over two years ago, on August 2, 2018.



On July 31, 2020, after reporting strong&nbsp;<a href="https://www.apple.com/newsroom/2020/07/apple-reports-third-quarter-results/" target="_blank" rel="noreferrer noopener">third-quarter earnings</a>, Apple surpassed Saudi state oil giant Aramco to become the world’s most valuable publicly traded company.



While Saudi Aramco&nbsp;<a href="https://www.cnbc.com/2019/12/12/saudi-aramco-hits-2-trillion-market-cap-on-second-day-of-trading.html" target="_blank" rel="noreferrer noopener">surpassed a $2 trillion valuation</a>&nbsp;in December 2019, plunging oil prices amid the coronavirus pandemic have since hurt its stock.



SURPRISING FACT



At $2 trillion, Apple’s market value is now&nbsp;<a href="https://twitter.com/charliebilello/status/1296095582533148674?s=20" target="_blank" rel="noreferrer noopener">higher than the GDP</a>&nbsp;of numerous developed countries, including Italy, Brazil, Canada, Russia and South Korea, to name a few.



WHAT TO WATCH FOR



Apple shares are about to get more affordable for investors, too. The company will finalize its four-for-one stock split at the end of August, which means a single share will be worth around $117. While the value of the company will remain the same, there will now be more shares available trading at lower prices.



KEY BACKGROUND



Apple has thrived during the pandemic, as many people were forced to stay at home. The company has benefited from work-from-home trends and strong online sales; It posted record third-quarter earnings in late July, with&nbsp;<a href="https://www.apple.com/newsroom/2020/07/apple-reports-third-quarter-results/" target="_blank" rel="noreferrer noopener">nearly $60 billion in revenue</a>, not to mention double-digit growth in its products and services segments.



FURTHER READING



<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/08/13/competition-from-apple-wont-derail-peloton-analysts-say/">Could Competition From Apple Derail Peloton? Not So Fast, Analysts Say</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/sergeiklebnikov/2020/07/24/apple-microsoft-amazon-google-and-facebook-make-up-a-record-chunk-of-the-sp-500-heres-why-that-might-be-dangerous/">Apple, Microsoft, Amazon, Google And Facebook Make Up A Record Chunk Of The S&amp;P 500. Here’s Why That Might Be Dangerous</a> (Forbes)



-Sergei Klebnikov, Forbes Staff

DOUNIAMAG-US-IT-APPLE-NEWS-FEED

Apple Becomes First U.S. Company Worth More Than $2 Trillion

Facebook on Friday became the latest major tech company to criticize Apple for taking a 30% cut of app purchases, adding to growing criticism over what companies say are Apple’s unfair and anti-competitive App Store policies that amount to a “shakedown” of competitors.



KEY FACTS



Apple&nbsp;<a href="https://www.apple.com/ios/app-store/principles-practices/" target="_blank" rel="noreferrer noopener">takes</a>&nbsp;a 30% cut of all app purchases and requires developers use Apple’s payments systems so it can also charge a fee for in-app purchases and subscriptions.



Facebook said Friday it asked Apple to reduce the 30% fee for a new feature letting small businesses charge users for online Facebook events, but Apple “dismissed” their requests and as a result small businesses will only be paid 70% from transactions on iPhones, the company said.



Facebook’s rebuke comes a day after Fortnite owner Epic Games sued both Apple and Google over the 30% fee and launched a public relations blitz against the tech giants with the hashtag #FreeFortnite, arguing the “tax” forces companies to increase prices in order to pay for the fee.



Music streaming service Spotifty last year&nbsp;<a href="https://newsroom.spotify.com/2019-03-13/consumers-and-innovators-win-on-a-level-playing-field/" target="_blank" rel="noreferrer noopener">filed</a>&nbsp;a complaint with the European Union’s Antitrust Commission over what it called the “Apple Tax,” arguing that it can’t compete with Apple Music—which isn’t subject to the fee—if it has to raise prices to cover the charge.



Though Airbnb and ClassPass don’t normally have to pay the fee because the fee doesn’t apply to physical services outside their apps, they did have to start paying when they began offering virtual classes and information sessions during the pandemic,&nbsp;<a href="https://www.nytimes.com/2020/07/28/technology/apple-app-store-airbnb-classpass.html?action=click&amp;module=Top%20Stories&amp;pgtype=Homepage" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to the&nbsp;New York Times, drawing complaints from both companies.&nbsp;



In June, Basecamp founder David Heinemeier Hansson called Apple’s fee a “shakedown” and a “ransom” after the company’s email app was rejected from the App Store because it used a different payments system,&nbsp;<a href="https://twitter.com/dhh/status/1273019513538314245?s=20" target="_blank" rel="noreferrer noopener">adding</a>&nbsp;that “Apple&#8217;s abusive behavior with the App Store has been an open secret in the developer community for years.”



CHIEF CRITIC



Apple did not immediately respond to a request for comment from&nbsp;Forbes, but CEO Tim Cook defended the company’s App Store practices at a House Antitrust Subcommittee hearing last month. “For the vast majority of the apps on the App Store, developers keep 100% of the money they make,” he said. “&#8230;Commissions are comparable to or lower than commissions charged by the majority of our competitors. And they are vastly lower than the 50-70% that software developers paid to distribute their work before we launched the App Store.”



KEY BACKGROUND



Rep. Jerrold Nadler (D-N.Y.) asked Cook during the hearing if continuing to charge companies a 30% fee as they move their services online during the pandemic amounts to “pandemic profiteering.” Cook responded by saying Apple “would never do that,” and acknowledged he was working with companies to find a solution. But even as Cook said the fee applies to all developers and apps equally, emails released during the hearing show that Apple&nbsp;<a href="https://www.forbes.com/sites/rachelsandler/2020/07/29/apple-offered-to-reduce-its-fee-to-get-amazon-prime-video-on-devices-emails-show/#58889c313eae">offered</a>&nbsp;to lower its fee in order to get Amazon Prime Video on devices in 2017.



TANGENT



Google also charges a 30% fee for apps on the Google Play Store, but much of the focus has been on Apple, which is usually more lucrative for developers than Google.



-Rachel Sandler, Forbes Staff

Allen & Co. Holds Its Annual Sun Valley Conference In Idaho

Spotify, Epic Games, Facebook: Major Companies Take Aim At Apple’s App Store Fee

Topline: Apple will donate 9 million N95 protective masks to combat the coronavirus, Vice President Mike Pence said on Tuesday, making Apple one of several California tech companies pitching in as hospitals across the country report a shortage of protective gear.



<ul><li>Pence thanked Apple for agreeing to donate 9 million N95 respirator masks to healthcare facilities across the country during a press briefing on Tuesday.</li><li>Pence’s remarks come after Apple CEO Tim Cook tweeted over the weekend the company was “working to help source supplies for healthcare providers fighting COVID-19” and “donating millions of masks for health professionals in the US and Europe,” but did not offer more specifics.</li><li>N95 respirators are masks that form a protective seal around a wearer’s mouth, filtering&nbsp; out at least 95% of particles in the air, according to the Centers for Disease Control, which makes them necessary to protect healthcare workers from being exposed to the disease from patients.</li><li>Facebook has also said it is donating its stockpile of 720,000 masks purchased during the California wildfires last year, which degraded the air quality in the San Francisco Bay Area.</li><li>Apple did not immediately respond to a request for comment from&nbsp;Forbes&nbsp;asking if all of the donated masks were stockpiled because of the wildfires or if the company got them from somewhere else.</li></ul>



Chief critic: Teddy Schleifer, a reporter at Recode, <a rel="noreferrer noopener" href="https://www.vox.com/recode/2020/3/23/21191147/medical-masks-coronavirus-shortage-silicon-valley-donations-salesforce-apple-facebook-tesla" target="_blank">wrote</a> that health systems shouldn’t rely on the generosity of big tech companies to make up for the failures of the federal government. 



“But there is a risk in relying on corporate philanthropy—rather than the government—in solving this problem. For starters, it depends on the voluntary generosity of these companies to deal with an unprecedented emergency, an altruism that could vanish at any time,” he&nbsp;<a href="https://www.vox.com/recode/2020/3/23/21191147/medical-masks-coronavirus-shortage-silicon-valley-donations-salesforce-apple-facebook-tesla" target="_blank" rel="noreferrer noopener">wrote</a>.



Crucial quote: &#8220;And I spoke today, and the president spoke last week, with Tim Cook of Apple. And at this moment in time Apple went to their store houses and is donating 9 million N95 masks to healthcare facilities all across the country and to the national stockpile,” Pence said.



Key background: Apple is one of several California tech companies to give away N95 masks. In addition to Facebook, Salesforce, Tesla and IBM have also announced mask donations.



News peg: Doctors and nurses are sounding the alarm that they don’t have enough masks to protect healthcare workers. Not only does inadequate protective gear put important frontline health workers at risk, public health experts say, any situation endangering medical personnel may only further depletes the U.S. health system which already doesn’t have enough capacity to handle a surge in cases. State officials in New York and Illinois have criticized President Donald Trump for not stepping in to force companies to manufacture masks or allocate masks from private companies to ensure that states don’t <a rel="noreferrer noopener" href="https://www.businessinsider.com/coronavirus-cuomo-says-states-are-bidding-up-cost-of-supplies-2020-3" target="_blank">outbid</a> each other for the same supplies. 



&#8211;<a href="https://www.forbes.com/sites/rachelsandler/">Rachel Sandler</a>, Forbes Staff, Breaking News

gettyimages-1207642189-594×594

Apple Is Donating 9 Million Masks To Combat The Coronavirus

Apple aficionados have learned to wait for the end of its product announcements for the most tantalizing news: the &#8220;one more thing&#8221; that Steve Jobs would toss off, almost as an afterthought, and send the audience into a frenzy.



This time, the finale of Apple&#8217;s long-anticipated announcement launching its Apple TV+ video subscription service Monday in Cupertino — the signature moment that brought some in the audience to their feet — took human form. Oprah Winfrey strode on stage wearing Apple-white and, as the applause died down, responded with a comically understated, &#8220;Hi.&#8221;



Winfrey talked publicly for the first time about her multi-year deal with Apple — a partnership CEO Tim Cook has referenced frequently, if vaguely, on earnings calls with the Wall Street analysts. 



The talk show host turned media executive said she&#8217;s working on a documentary dealing with the sexual harassment and assault in the workplace, currently titled&nbsp;Toxic Labor,&nbsp;and an untitled multi-part series exploring mental health issues.



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&#8220;The Apple platform has allowed me to do what I do in a whole new way — connecting people and taking it to a whole new level, because they have a billion pockets y&#8217;all,&#8221; Winfrey said, a reference to the 1.4 billion Apple devices in use around the world that some analysts believe give its streaming service a competitive edge over established rivals, such as Netflix.



Winfrey was the headliner at an event packed with Hollywood celebrities. Director Steven Spielberg took the stage for his inaugural appearance at an Apple event to talk about his revival of the anthology series&nbsp;Amazing Stories.&nbsp;



Actors Reese Witherspoon and Jennifer Aniston touted their new project,&nbsp;The Morning Show,&nbsp;which explores the power and gender dynamics of morning news shows — an opportunity so appealing, the&nbsp;Friends&nbsp;star said it brought her back to TV.



Director J.J. Abrams shared the stage with Grammy-nominated artist Sara Bareilles to tout their collaboration on&nbsp;Little Voice,&nbsp;a show about a young, flawed artist finding her voice. Kumail Nanjiani of the HBO series&nbsp;Silicon Valley&nbsp;will explore immigrant stories in the series&nbsp;Our Little America.&nbsp;Even&nbsp;Sesame Street&nbsp;staple Big Bird stepped into the spotlight to announce a children&#8217;s series called&nbsp;Helpsters.



READ MORE |<a href="https://www.forbesafrica.com/current-affairs/2019/01/30/apple-lowers-some-iphone-prices-outside-us-to-offset-strong-dollar/" target="_blank" rel="noreferrer noopener" aria-label="Apple Lowers Some iPhone Prices Outside US To Offset Strong Dollar (opens in a new tab)">Apple Lowers Some iPhone Prices Outside US To Offset Strong Dollar</a>



Apple spelled out its broad ambitions for the forthcoming streaming service, saying it had partnered with the most accomplished storytellers as it seeks to define Apple TV+ as a home for quality entertainment. The tech company did more showing than telling at the Steve Jobs Theater Monday — each celebrity presentation was notably devoid of trailers.



It&#8217;s possible that the marking impresarios at Apple are holding their promotional firepower until a date closer to the Apple TV+ launch. Today&#8217;s event serves as a placeholder, staking Apple&#8217;s claim on the TV landscape ahead of the Walt Disney Co.&#8217;s April 11 investor briefing to discuss details of the Disney+ streaming service, or the television industry&#8217;s Upfront presentations, showcasing the fall schedule.



The Apple TV+ service will launch sometime this fall — though pricing has not been announced. It will be available through an updated version of the Apple TV app that&#8217;s already on millions of iPhones, iPads and Apple TV streaming devices. A new version of the app, due out in May, will work like a cable-TV service, where users can choose which TV channels they want to pay for and watch, including HBO, Showtime and Starz.



On the same day as Apple&#8217;s big announcement for original programming,&nbsp;Bloomberg reported&nbsp;that Google has cancelled plans for big budget scripted shows on YouTube. Google&nbsp;denied claims&nbsp;from Bloomberg sources that said the tech giant stopped accepting pitches for original scripts, but confirmed plans to launch ad-supported programming alongside YouTube Premium, $11.99-per-month ad-free access to YouTube Music and original content.



-Dawn Chmielewski; Forbes Staff

Apple Holds Product Launch Event In Cupertino

Apple Brings Out Hollywood’s Heavyweights To Kick Off Its Apple TV+ Streaming Service

Apple Inc plans to cut the price of some of its flagship iPhones for only the second time in the device’s 12-year history, pegging its retail value to past prices in local currencies outside the United States instead of the rising U.S. dollar. 



The move is an attempt to stem weak sales of the iPhone, particularly in overseas markets such as China, where a 10 percent rise in the U.S. dollar over the past year or so has made Apple’s products &#8211; which already compete at the top end of the market &#8211; much pricier than rivals.



Apple Chief Executive Tim Cook disclosed the plan on Tuesday after the company reported the first-ever dip in iPhone sales during the key holiday shopping period. The company has only once before cut iPhone prices, shortly after it debuted in 2007.



Apple did not say in which countries it would adjust iPhone prices. Resellers in China already began cutting iPhone prices earlier this month after Apple lowered its sales forecast for the quarter ended in December.



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The company priced its new iPhone XS, which was released in September, at $999, the same price in U.S. dollars as its predecessor, 2017’s iPhone X.



That worked for U.S. consumers, but in countries such as China and Turkey the local currency had fallen so much against the surging U.S. dollar, it made the phone significantly pricier than its predecessor a year before. Apple had essentially asked the consumer to bear the cost of the strengthening dollar.



On Tuesday, Cook said Apple will adjust foreign prices in some markets by resetting them at or close to what they were one year before in local currencies. Effectively that means Apple will absorb the cost of the strengthening dollar.



“We’ve decided to go back to (iPhone prices) more commensurate with what our local prices were a year ago, in hopes of helping the sales in those areas,” Cook told Reuters in an interview.



<h4 class="wp-block-heading">RISING DOLLAR HURTS APPLE SALES</h4>



In the company’s quarterly earnings call on Tuesday, Cook also highlighted the impact of foreign exchange problems in Turkey, where he said the local lira had depreciated by 33 percent against the dollar and Apple’s sales were down by $700 million from the previous year. In November, Apple also cited currency pressure on its prices in Brazil, India and Russia.



Apple has not said when or how often it might reset its prices because of foreign currency changes.



Chief Financial Officer Luca Maestri said the price adjustments may not extend to its services business, which includes Apple Music and the App Store.



READ MORE | <a href="https://www.forbesafrica.com/investment/2019/01/15/not-so-fast-can-elon-musk-really-open-teslas-china-gigafactory-this-year/" target="_blank" rel="noreferrer noopener" aria-label="Not So Fast: Can Elon Musk Really Open Tesla’s China Gigafactory This Year? (opens in a new tab)">Not So Fast: Can Elon Musk Really Open Tesla’s China Gigafactory This Year?</a>



While that unit beat analyst expectations with $10.8 billion in sales in the quarter ended in December, growth has slowed compared to previous years.



Apple posts revenue drop but optimistic on China



Maestri said slower growth was partly because prices rose for users in non-U.S. markets.



“Roughly 60 percent of our services business is outside the United States, and as you know, the U.S. dollar has appreciated in recent months,” Maestri said. “And in general, we tend not to reprice our services for foreign exchange on a very frequent basis.” -Reuters



-Stephen Nellis

Tag: tim cook

FORBES AFRICA SOCIAL MEDIA

Apple Profit Doubles On Record Revenue In Second Quarter As iPhone Sales Beat Expectations

Apple Becomes First U.S. Company Worth More Than $2 Trillion

Spotify, Epic Games, Facebook: Major Companies Take Aim At Apple’s App Store Fee

Apple Is Donating 9 Million Masks To Combat The Coronavirus

Apple Brings Out Hollywood’s Heavyweights To Kick Off Its Apple TV+ Streaming Service

Apple Lowers Some iPhone Prices Outside US To Offset Strong Dollar