Apple Inc. CEO Tim Cook said consumer adoption of its new 5G capable devices is just beginning after a relatively slow start.
The iPhone-maker launched its first slate of 5G-capable iPhones — the iPhone 12, iPhone 12 mini, iPhone 12 Pro and iPhone 12 Pro Max — in October 2020. Prices for the lineup range from $699 to $1,099. In April, Apple followed up with the debut of a 5G-capable iPad Pro priced between $799 and $1,099, depending on the model.
Phone-makers such as Samsung Electronics Co. Ltd. and LG Electronics Inc. spent much of 2019 racing to be first to release 5G-enabled smartphones, but many industry experts at the time had muted expectations for device sales given wireless network operators' piecemeal rollout strategies and a limited number of 5G use cases at the time.
Speaking on an April 28 earnings call, Cook said penetration rates for 5G are still relatively low at this point due to uneven deployment and adoption timelines around the globe. China and the U.S., for instance, have moved "quickly" to 5G, while other regions have been slower.
"It's obviously the early days of 5G," Cook said. "Different countries are in different points ... and so a lot of the 5G upgrades will be in front of us, not behind us"
IPhone sales revenue for the just-ended quarter came to $47.94 billion, up from $28.96 billion in the year-ago period, driven by strong continued demand for the iPhone 12 lineup, Cook said. He said there was a "record number" of iPhone upgraders during the most recent period.
Turning to other product segments, iPad sales during the just-ended quarter were the company's highest in close to a decade; Mac sales set an "all-time revenue record," Cook said.
Beyond a refreshed iPad Pro, Apple at its April hardware event also unveiled a new iMac. Both devices are equipped with Apple's inaugural M1 chip. In terms of 5G, the iPad Pro specifically includes millimeter-wave spectrum, which can carry massive amounts of data at high speeds, though its shorter wavelengths prevent it from traveling long distances and penetrating certain surfaces.
Sales for the iPad grew to $7.81 billion in the just-ended quarter from $4.37 billion a year ago. Mac computer sales came to $9.10 billion for the company's fiscal second quarter ended March 27, up from $5.35 billion in the same period a year earlier.
Apple did not provide specific revenue guidance for the current quarter but expects revenue growth to be "strong double digits" year over year, Apple CFO Luca Maestri said on the April 28 call. However, Maestri cautioned of a sequential revenue decline between the just-ended quarter and the current period due to the delayed launch timing of the iPhone 12 models amid pandemic-driven supply constraints.
Such supply constraints will have a revenue impact of $3 billion to $4 billion in the current quarter, the CFO added.
Apple's consolidated net sales for the quarter ended March 27 came to $89.58 billion, up from $58.31 billion in the year-ago period. The S&P Capital IQ consensus estimate for Apple's fiscal second-quarter total revenue was $77.29 billion.
The company reported net income of $23.63 billion, or $1.40 per share, for the just-ended period, up from $11.25 billion, or 64 cents per share, in the same period a year earlier. The S&P Capital IQ consensus EPS estimate for the quarter was 98 cents on a GAAP basis and 99 cents on a normalized basis.
Meanwhile, services net sales jumped to $16.90 billion from $13.35 billion a year ago. Net sales in the company's Wearables, Home and Accessories segment grew to $7.84 billion, up from $6.28 billion.
Apple's board of directors also declared a cash dividend of 22 cents per share of the company's common stock. The dividend is payable May 13 to shareholders of record as of the close of business May 10.
The board of directors also authorized an increase of $90 billion to the existing share repurchase program.
Apple shares were up in after-market speculation on April 28 as the company's earnings call came to a close.
