Despite all the uncertainty around the world, Apple posted record June quarter revenue of $83.0 billion, up 2% from the year-ago quarter, and Android users helped Apple achieve this.
Well, those who ditch the Android platform and switch to the iPhone have helped.
Here’s what Apple CEO Tim Cook had to say during the earnings call following the release of third-quarter results:
“Let’s move on to iPhone. We set a June quarter record for iPhone revenue and change.”
“Switchers” are what Apple calls those who switch to iPhone from another platform. And since the death of the Windows Phone platform, these switchers come from Android.
Apple CFO Luca Maestri elaborated on this:
“And iPhone’s active installed base hit a new all-time high across all geographies thanks to this level of sales performance combined with unparalleled customer loyalty. In fact, the latest US consumer survey from 451 Research indicates a 98 iPhone customer satisfaction We also attracted a record number of switchers for the June quarter, with strong double-digit year-over-year growth.”
So where did these Android switches come from? Cook expands on this in response to an analyst’s question:
“And we continue to execute in some important geographies where iPhone penetration is very low. Some of those were mentioned in the opening remarks between Indonesia and Vietnam, and India, where we’ve been pretty successful, and the iPhone tends to be the driving force for those markets, especially in the early stages of creating the market there for Apple products, and so we’re really looking at all of those things, from the grassroots installed to the number of switches through the geographical distribution.
And what does Cook attribute to the iPhone’s appeal to switchers? High levels of customer satisfaction and 5G:
“Of course, the most important thing for us is to maintain incredible customer satisfaction and customer loyalty. And we’re really happy that it’s currently at 98% for the latest iPhones. And so, those are the things that 5G has been an accelerator. And 5G penetration, especially if you look at it globally, is still quite low. In some geographies it’s obviously higher, but in the Worldwide, 5G penetration is still low. And so, I think there is reason to be optimistic.”
Looking at the numbers, Apple generated slightly more revenue for iPhone and Services, up 3% and 12%, respectively, and slightly less for Mac, iPad, and Wearables, Home. and Accessories,” down 10%, 2%, and 8%, respectively.
Net sales by category (in millions) | Q3 2022 | Q3 2021 |
iPhone | 40,665 | 39,570 |
Mac | 7,382 | 8,235 |
iPad | 7,382 | 7,368 |
Wearables, Home and Accessories | 7,382 | 8,775 |
Services | 19,604 | 17,486 |
Total net sales | $82,959 | $81,434 |
Apple cited “supply constraints and adverse effects” as the reason for the drop in Mac revenue. However, it has yet to raise alarm bells as this comes at an exciting time for Apple as it pushes new Apple Silicon hardware.
Maybe Apple needs to push to attract more Windows-to-Mac switchers.