Analysis

Apple made more money in China last quarter than the recorded music industry did in 2014


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Apple’s quarterly financial results last night were a now-familiar tale of massive revenues and profits, although the performance of the company’s iPad tablet remains the one less positive aspect of its business.

The key figures: Apple’s quarterly revenues were $58bn, up 27.2% year-on-year, while the company recorded a net profit of $13.6bn. “We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” said CEO Tim Cook.

What’s missing from that sentence? iPad. Apple sold 61.2m iPhones in the first quarter of this year, up from 43.7m in Q1 last year. Its Mac sales rose from 4.1m to 4.6m in the same time period, but its iPad sales declined from 16.4m to 12.6m, meaning Apple made more money in the quarter from Macs than from iPads. Cook also noted that the App Store had its “best quarter ever” with revenues from apps up 29% year-on-year.

One sobering stat: Apple made more money in China alone last quarter – $16.8bn – than the recorded music industry made in the whole of 2014: just under $15bn. Although bear in mind that the latter stat doesn’t include live and other income.

But what’s with those iPad sales? “Have we had cannibalisation? The answer is yes. We’re clearly seeing cannibalisation from iPhone and on the other side, from the Mac,” Cook told analysts. “And of course, as I’ve said before, we’ve never worried about that. It is what it is. That will play out, and at some point, it will stabilise. I’m not sure precisely when, but I’m pretty confident that it will.”

Stuart Dredge

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