For most firms, a quarterly earnings report like the one Apple released earlier this week would be cause to break out the champagne.
“We completed our fiscal year in September, and we are proud to report revenue of $234 billion, an increase of 28 percent and $51 billion over 2014,” Apple CEO Tim Cook told investors during a call after the numbers went public. “This is our largest absolute revenue growth ever. To put that in some perspective, our growth in one year was greater than the full year revenue of almost 90 percent of the companies in the Fortune 500.”
Apple also had another remarkably good quarter for the iPhone with more than 48 million units sold worldwide and a seemingly continuous stream of Android users jumping ship to iOS.
But Apple revenue forecasts were somewhat less bullish than Wall Street’s for its upcoming quarter. Apple is predicting revenue between $75.5 billion and $77.5 billion for the next quarter. That’s an increase over last year’s revenue, but analysts were more optimistic, forecasting a $77 billion revenue increase — at the low end.
Apple’s conservatism on its own revenue growth, combined with a potentially cooling Chinese market for high-end smartphones, seems to have left The Street concerned about Apple’s future. Said simply, Apple fortunes at this point more or less rise and fall on the success of the iPhone, and market watchers have their doubts that Apple can keep this up indefinitely as the smartphone market in the U.S. and around the world gets more saturated.
But in the days following the Apple earnings report, some non-iPhone hardware has managed to make the spotlight and even cough up some surprisingly good news for Apple.
Apple Seems To Have Sold More Watches Than Expected
Apple, thus far, has neglected to break out specific sales figure for its newest gadget, the Apple Watch, though Tim Cook confirmed several times during Apple’s earnings call that he is satisfied with its progress.
Some news, however, has managed to leak out anyway, care of a 10-Q filing with the SEC. In the filing, Apple notes over 100 percent of the year-over-year revenue growth in its “Other Products” category is attributed to the Apple Watch.
That catch-all category expanded from $8.379 billion in 2014 to $10.067 billion in fiscal 2015. Which means, at minimum, the new wearable brought in $1.688 billion, as first reported by VentureBeat.
The “Other Products” category is also home to Apple TV, Beats and the iPod line. It has been a declining category for the retail tech giant, though the release of the watch has, for now, reversed that trajectory. During the watch’s first quarter on the market, Apple saw a 56 percent sequential increase in revenue to $2.64 billion.
Apple has offered no hard numbers on the watch’s sales so far, though it has offered some peeks. In July, it offered up that Apple Watch sales had outstripped iPad sales in its first nine weeks on the market. Overall, the category that houses it grew 61 percent year over year in fiscal 2015.
How many watches that translates into is a little harder to say since Apple offers various levels at a wide range of price points. The least expensive model is the Sport; it has also been confirmed by Apple as the most expensive model. If that $1.7 billion figure was divided among Apple Watch Sports, that would imply that about 5 million units had been sold.
Apple TV — The Reviews Roll In
The other often-touted next generation for Apple is its TV product — a piece of hardware once dubbed a “hobby” by Steve Jobs. That hobby has become a pretty serious business as Apple is dropping the latest incarnation of its $149 streaming device just in time for Christmas shopping to kick off.
And the first reviews are in.
They are less than inspiring.
It isn’t that Apple is getting panned exactly, so much as it is getting rather tepid reviews. Good — but not great. Performs as well or better than anything on the market — but not qualitatively better.
Yahoo’s review noted that it was buggy, though the reviewer did call it out as having “lots of potential.” Others were less willing to hedge, noting that if you wanted “a giant iPhone for you living room,” this was the product for you.
Still, the device also drew some raves. BuzzFeed was particularly enthusiastic.
“Turns out custom-building a TV from a broad palette of apps that includes everything from pay TV channels and games to travel accommodation services and Periscope is a great way to get exactly the TV experience you want — or close to it, anyway,” BuzzFeed’s reviewer wrote.
But, on the whole, while reviewers weren’t horribly disappointed, they were hardly rocked either.
Which functions as a pretty good encapsulation of Apple’s fortunes outside the iPhone as 2015 draws to a close — good, with lots of potential, but nothing solidly world–changing on the horizon just yet.