Apple's Mind-Boggling Financial Results: 10 High-Growth Highlights

Apple CEO Tim Cook (Image via CrunchBase)

To get a sense of just how stunningly fast Apple Inc. is growing—even as it has blown past the $100 billion revenue mark and become a huge corporation—try to wrap your head around this perspective:

Just 15 months ago, Steve Jobs made a surprise appearance on Apple’s quarterly earnings-call because the company had cracked $20 billion in revenue for the first time. A great achievement, no doubt.

But in last week’s earnings call for the three months ended Dec. 31, Apple revealed that its growth in revenue for just that quarter was about $19.6 billion. What was an all-time company milestone 15 months ago has become—astonishingly—the incremental growth of today.

I realize I’m tossing around some loaded terms here—mind-boggling, stunning, astonishingly—but the unprecedented achievement Apple has made in the past few years is not just that it is about six months away from becoming the largest technology company on Earth, but that it very soon will be the world’s biggest tech company, the world’s most highly valued corporation, and the world’s fastest-growing publicly traded company.

Among the lessons Apple is offering is that huge levels of growth don’t require acquisitions; retail can be a high-growth and highly profitable business; some sectors of the PC market are growing at lusty rates (that would be the Mac); and that the delivery of a superb customer experience is becoming indispensable regardless of what business you’re in.

From the Morningstar transcript of last week’s Apple earnings call with analysts featuring Apple CEO Tim Cook and CFO Peter Oppenheimer, I’ve extracted 10 highlights that reveal the range and depth of Apple’s growth prowess, spanning from phones to music and books to retail stores to app-creation businesses that developers adore to tablets and beyond.

While each of these 12 is interesting in its own right, and while the 12 collectively are breath-taking, the rest of us need to think very hard about the changes that this cultural and technological powerhouse is triggering in today’s business world.

And we would all be wise to get on the right side of those wide-reaching and profound changes.

1) Phenomenal growth off of an enormous base. As noted above, Apple revenue for the quarter ended Dec. 31 grew by just under $20 billion, to a new record of $46.3 billion. Just 15 months ago, $20 billion was the company’s total revenue for the entire quarter, and was at the time a remarkable achievement. Question: Anybody think your business won’t be impacted by the mobile-social-customer-experience thing?

2) Apple iCloud nearing 100 million customers. Last week Apple said that after being on the market just a few months, its iCloud had attracted more than 85 million customers. That would mean an average of several per week, and that means that by the time you read this, about 90 million people will be playing in the Apple iCloud. Question: Anbody still think this cloud thing’s a fad?

3) Apple TV: still just “a hobby” but growing rapidly. While Oppenheimer didn’t mention Apple TV in his corporate-performance overview, Tim Cook did discuss it briefly in the Q&A. He said that in the fiscal year ended Sept. 30, Apple sold about 2.8 million units of Apple TV. But in the very next quarter, ending Dec. 31, it sold 1.4 million. But, Cook said, in terms of Apple TV revenue on the company’s overall figures, “we still classify this as a hobby.” Question: What happens when Apple TV stops being a hobby, and the company begins to get serious about it?

4) Huge growth expected to continue. While the first-quarter numbers reported last week were a bit of a high-end anomaly because they encompass the holiday season and because Apple accounted for 14 full weeks in the quarter, Oppenheimer’s guidance for the next three months calls for Apple to grow at about 32% year over year, with revenue expected to hit $32.5 billion compared to last year’s $24.7 billion for the same quarter. Question: Is your company moving full-speed into mobile commerce? Because the world is going there very, very quickly.

5) iPhone sales hit 37 million for the quarter. Even with the 14-week quarter, that’s still about 380,000 iPhones every single day. In the year-earlier quarter, Apple sold 16.2 million, so unit sales jumped 128%. In particular, the iPhone 4S with the Siri voice assistant was a spectacular hit and will no doubt continue to be so for quite some time. Four months ago, I wrote a column called iPhone 5: ‘Most Revolutionary User Interface in History’, and Siri and the iPhone 4S are proving Jason Schwarz’s claim to be right on the money. On the financial side, iPhones accounted for $24.4 billion in quarterly revenue, up from $10.5 billion last year. Question: How will your engagement with customers change in a world in which voice assistants become mainstream instead of obscure outliers?

6) iPhone is holding its own against Android. Cook said that data from three different research firms for U.S. sales of mobile phones showed a very close contest: NPD said that for October and November, iPhone’s market share was 43% while Android’s was 47%; Nielsen data for October, November and December showed iPhone at 45% and Android at 47%; and comScore data for October and November had iPhone at 42% and Android at 41%. Question: Which platform offers the best value and the most capabilities for the enterprise?

7) Mac PC sales jumped 26% in the quarter. Cook said that while IDC was predicting zero growth for the PC sector overall, Mac revenue grew 26% to $5.2 billion, with Asia-Pacific sales growing at 58% year over year. And over at the Mac App Store, which has been open less than one year, customers have downloaded more than 100 million apps. Question: Is there a Mac platform in your enterprise’s future? Should there be?

8) iPad quarterly sales reach 15.4 million units. That’s up 111% from last year’s 7.3 million, and iPad revenue doubled to $9.1 billion from $4.6 billion in the year-earlier quarter. You can read more about some big new corporate adopters of the iPad in Apple Surges in Corporate Market with iPhone, iPad, and Mac.

9) iTunes sets revenue record. The hits just keep on coming as the online music store that torpedoed the record industry generated sales of $1.7 billion in the quarter.

10) Apple Retail Stores defy brick-and-mortar obituaries. Of all of Apple’s successful business units, this is the one that I find most impressive. Apple has done far more than simply uncover a way to showcase some of its great products in retail showrooms—rather, it is leveraging its 361 stores to redefine customer engagement and relationships, it is pioneering entirely new retail check-out practices such as no more check-out lines, and it has obliterated the dogma that brick-and-mortar stores in our digital age are dinosaurs. Question: Is there something your company can learn from the Apple retail experience?

In closing, if you’ve found this list interesting, you might also like another set of Apple-related insights that I put together before last week’s earnings announcement: Apple Inc.: 10 Astonishing Facts. It’s focused largely on Apple’s global operations strategy and execution and, as is the case with the piece above, it contains some eye-popping numbers as well as some great lessons for every business.

(Follow me on Twitter at bobevansSAP.)

RECOMMENDED READING:

Apple Inc.: 10 Astonishing Facts

Steve Jobs and His War on Google

iPhone 5: ‘Most Revolutionary User Interface in History’

‘Steve Jobs Didn’t Really Invent Anything.’ Really??

The Coolest Products of the Decade: Apple and Coca-Cola

Apple iPad Unleashing Creative Destruction on PC Industry

The Top 10 Reasons SAP HANA Is Disrupting Larry Ellison’s Grand Plans

SAP HANA and the Game-Changing Power of Speed

Top 10 Reasons for SAP Acquisition from SuccessFactors CEO Lars Dalgaard

Larry Ellison and Marc Benioff Just Can’t Agree: What Is the Cloud?