Apple delivers sales surge on strong demand for premium iPhones

Strong demand for premium iPhones helped Apple deliver bumper sales of $81.4bn in its latest quarter as it shrugged off the impact of chip shortages.

The US tech giant’s revenues for the three months to 26 June were up 36% on a year earlier while profits nearly doubled from $11.3bn to $21.7bn.

Chief executive Tim Cook told the Reuters news agency that its strongest growth came from China, where sales rose 58% to $14.8bn buoyed by a broad demand for products from the iPhone to the Mac computer and wearable products.

The results came on a bumper day of US tech results with software giant Microsoft and Google owner Alphabet also delivering better than expected earnings.

Shares in Apple, which have enjoyed a spiral in value to make it worth nearly $2.5trn, were little moved by its strong figures.

Apple’s iPhone sales of $39.6bn, representing nearly half of its total revenues, were up by nearly 50% on a year ago and Mr Cook said the premium 12 Pro and 12 Pro Max were strong sellers, helping to beef up profit margins.

The tech giant’s services business, which includes Apple TV subscriptions as well as its App Store, saw revenues jump by about a third to $17.5bn with subscriber numbers on Apple’s various platforms jumping by 40 million to 700 million over the period.

Apple did suffer a setback as the global chip shortage held back sales of its Macs and iPads but this was at “lower than the low end” of its previously forecast range of a $3-4bn hit, Mr Cook said.

Sales of iPads and Macs were slightly ahead of analysts’ expectations.

Elsewhere on Tuesday, Google owner Alphabet posted a better than expected 62% surge in revenues to $61.9bn for the April-June quarter.

The growth was powered by a surge in ad spending amid what chief executive Sundar Pichai described as a “rising tide of online activity in many parts of the world”.

It compared with a period last year when the coronavirus downturn was taking its toll on ad sales.

Alphabet said revenue from Google advertising rose nearly 70% to $50.4bn while for video streaming platform YouTube it jumped 84% to $7bn.

Quarterly profits more than doubled to $18.5bn from $7bn a year earlier and shares jumped 5% in after-hours trading.

Meanwhile, Microsoft grew annual profits for the year to the end of June by 38% to $61.3bn while revenues were up 18% to $168bn, with performance in its fourth quarter better than expected.

The company has been boosted by ongoing demand for its software and cloud computing services enabling remote working and study during the pandemic.

But shares dipped in after-hours trading as the results also showed a drop in sales for parts of its Windows operating system business blamed on supply chain constraints.

There was also a 4% fall in revenue from content and services for its Xbox games console compared to a particularly strong period early in the pandemic last year, though demand for the latest versions of the consoles themselves was still booming.

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