Apple revealed their financial results for the second quarter this week, and some of the results come as a surprise. In short, Apple is doing better overall than they were at this point last year, which is what you want to see in quarterly results. Also, the iPhone is making a killing, the iPad seems to be slowing down, and Apple really likes its investors.
First off, the iPhone is a huge money-maker for Apple, bringing in 56 percent of their revenue this quarter. They also sold a lot more of them this quarter (43.7 million) than in the same quarter last year (37 million). That leap is attributed in part to their deal with China Mobile, a new market they entered this year.
The iPad hasn’t fared quite so well. They sold 16.4 million of them this year, as opposed to almost 20 million in last year’s Q2. Apple CEO Tim Cook says “channel inventory” is to blame, and if you want details on that topic, Re/code has an excellent summary. But without the spin Cook may be adding, iPad sales being down isn’t a good thing for a company that keeps insisting tablets are the computing platform of the future.
Apple also announced that they’re doing a 7-1 split of their stock. That means if you own one share of the stock before the split, you now own seven shares, each of which is worth one-seventh of the pre-split price. The New York Times has a great article about the psychology of stock splits. Basically, they say splitting a stock shouldn’t make any difference in a company’s value, but it usually does– and they attribute the difference to the lower cost-per-share attracting (perhaps) the “wrong crowd” of investors.
Overall, however, Apple is doing fine, and Cook insisted that they’re “closer than they’ve ever been” to entering a new product category.
Could it be an iWatch? It’s probably an iWatch.