Apple’s last quarter of the calendar year (the first quarter of the following financial year) is usually massive, and Q1 2022 was not different.
The Cupertino-based company reported a massive $123.9 billion in revenue, a record for the company. It comfortably surpassed expectations of $118.66 from Wall Street. Also a record was the $34.6 billion profit in the last three months of 2021. All of these were achieved despite supply constraints that characterized the year.
Apple got a massive boost from its new iPhone 13 lineup sales during the holiday period. It was the first quarter that the latest phones were available. The iPhone continued to be Apple’s primary business, earning $71.63 billion, more than Microsoft’s total revenue of $51.7 billion for the same quarter.
Other businesses witnessed growth as well, except the iPad, which fell in revenue by 14 percent to bring in $7.2 billion. The company said it was the most affected by supply constraints.
The Mac sales went up by 25 percent, while the services division grew by 24 percent and earned 19.5 billion for Apple. Sales of wearables jumped 13 percent, bringing in $14.7 billion.
Apple’s board of directors has approved a cash dividend of 22 cents per share of common stock, to be paid on February 10th.
Looking forward, Apple will have a busy year in 2022, with new and updated products is reportedly in the pipeline. The company could be launching the 5G enabled iPhone SE next month. According to the trusted leaker, Mark Gurman, there could also be a refreshed Mac mini or iMac.
Apple is rumored to be bringing a new Mac Pro that runs on its own chip this year. Also in the works, according to leaks, is a new version of the AirPod Pro, with significant changes to its appearance and features.
All these are in addition to updated iPads and the regular iPhone updates. However, the iPhone will be far from usual because this is supposedly the year Apple ditches the front notch in favor of a cutout for the selfie camera.
Despite the resounding success that Q1 2022 had been, Apple revealed the effect of the supply issues it had. It missed out on $6 billion in potential sales due to a scarcity of chips. For this reason, orders for its MacBook Pros have long shipping times that may discourage buyers. This supply issue had dogged the MacBooks since they became available in October.
However, Tim Cook, Apple’s CEO, is optimistic that the situation will improve soon. “We saw supply constraints across most of our products,” he said to The Wall Street Journal. “We’re forecasting that we will be less [constrained] in March than we were in the December quarter.”
Despite Cook’s optimistic outlook, Apple will face multiple challenges this year, especially relating to its App Store practices. The company faces pressure to change its business model that sees it taking a 30 percent cut of all revenue passing through its payment system. Regulators are now demanding Apple allows developers to use third-party processors within their apps. In its home country, it has been mandated to let apps include links to making payments outside Apple’s ecosystem.
In the Netherlands, Apple has already been fined 5 million euros because the ACM was not impressed by its response to the order that it allows dating apps to use their preferred payment companies within their apps. Apple is liable to 5 million euros per week if it does not comply.
Apple has also capitulated in South Korea to allow apps to use non-Apple payment methods after a new law guarding app store operation was passed.