Apple Has Across-the-Board Q2 Revenue Increase, Led by $38 Billion in iPhone Sales

Apple shares jumped 4.4 percent Wednesday, closing at $176.52 after surprising some analysts with a 16 percent revenue spike to $61.1 billion. Despite an industrywide smartphone slowdown in the China market (see separate report, this issue), Apple’s international sales generated 65 percent of the quarter’s revenue, said the company in its FY 2018 Q2 earnings release, with 20 percent growth in greater China and Japan. IPhone revenue increased 14 percent year on year to $38 billion on a 3 percent bump in units to 52.2 million, said the company. Consumers chose iPhone X “more than any other iPhone each week” in the March quarter, as they did after the launch in the December quarter, said CEO Tim Cook. In response to an analyst’s question on whether iPhone X will be able to retain its $1,000 price point, Cook compared the product to having a team win the Super Bowl: “Maybe you want them to win by a few more points, but it's a Super Bowl winner, and that's how we feel about it," he said, saying he "could not be prouder of the product.” The iPad had a 6 percent year-on-year boost in revenue in the March quarter to $4 billion on a 2 percent unit increase to 9.1 million, said the company. The "other products" segment -- including AirPods, Apple TV, Watch, Beats products, HomePod and iPod touch -- grew 38 percent in revenue to $3.9 billion, it said. Apple’s wearables business is now the size of a Fortune 300 company, said Cook. At $9.1 billion, Apple’s services business led all segments in growth at 38 percent, it said. Crediting tax reform, Cook said Apple is able to deploy its global cash “more efficiently,” and it expects its direct investment in the economy to exceed $350 billion over the next five years, including $30 billion in capital expenditures; it also expects to create more than 20,000 U.S. jobs. The company is narrowing site selection for a new U.S. campus that will be announced later this year, he said.