Folks hoping to learn about any Apple Inc. plans to enter the payments market during the company’s April 23 fiscal second quarter earnings call with analysts were totally disappointed. The topic simply never came up.
About as close to a hint came during a discussion about new products, when CEO Tim Cook noted he feels comfortable expanding on what the company is working on but was not ready to pull the strings on anything.
“We care about every detail,” he said on the call. “It means much more to get it right than to get it first. Customers don’t look for that from Apple, they expect great – extremely great.” Apple also reminded the audience that its 24 acquisitions over the past 18 months shows the company is taking strides to address market needs, but the deals needed to make strategic sense, Cook said.
Despite the lack of discussion over any plans for Apple to become a payments player, Cook did throw out one of the more interesting facts that has everyone speculating on such plans. He said iTunes represents an important element for Apple, noting there are now 800 million iTunes accounts internationally, most with credit cards. iTunes revenue for the quarter was $4.6 billion, up 12.2 percent from $4.1 billion a year earlier. Apple had $156 billion in cash on reserve at end of the quarter.
As a company, Apple generated a March quarter record of $45.6 billion in revenue, up 4.6 percent from $43.6 billion during the same period ended March 31 last year. Net income rose 7.4 percent, to $10.2 billion from $9.5 billion. The share of revenue from hardware/devices (iPhone, iPad, iMac and iPod) during the quarter was 86.9 percent, down from 87.4 percent a year earlier. iPhone units sold during the quarter totaled 43.7 million (compared with 37.7 million expected by analysts), also a March record and up 16.8 percent from $37.4 million. iPhone sales revenue was up 13.5 percent, to $26.06 billion from $22.96 billion. Some 16.35 million iPad units were sold during the quarter, short of analyst estimates of 19.7 million units but at the high end of company forecasts.
Cook noted that the iPad has been the fastest growing product in Apple’s history, and the only product Apple has made that was a hit with consumers, businesses and enterprises. Apple has sold over 210 million iPads, he said, almost twice as many as there were iPhones sold in the same amount of time. In education, Apple has a 95 percent share in the U.S., Cook said. In the retail market, iPad has a 46 percent share in the U.S., Cook noted, adding earlier he would not have expected to see Apple’s brand in retail. Customer satisfaction is 98 percent with iPad, Cook said. Things in the pipeline to make iPads better also will help drive future sales, Cook said.
“I can’t help but feel extremely excited about where we are,” he said. “I am very bullish on iPad.” Cook added that there have been more than $1 billion in Apple TV box sales, so it didn’t feel right to him to call the product a “hobby,” as he once did. Some 20 million Apple TVs have been sold so far, suggesting the product has staying power, Cook said.