Notes from Apple’s Q1 2017 earnings call


Notes from Apple’s Q1 2017 earnings call

Kicking off Apple’s investor conference call following the company’s announcement of quarterly numbers for Q1 2017, Apple CEO Tim Cook noted that the quarterly results represented the highest revenue in Apple’s history, along with breaking unit and revenue records for iPhone, iPad, Apple Watch, services, and Mac, as well as four out of five major geographic segments where Apple operates. Cook explained that the iPhone had a tremendous quarter thanks to exceptional demand, and that the iPhone 7 Plus demand was especially strong and represented a higher portion of the new product mix than Apple has ever seen with prior “Plus” models. Apple Pay users more than tripled over the past year, with four new countries added in the past quarter, bringing Apple Pay into a total of 13 markets; hundreds of millions of transactions and billions of dollars in purchases were made using Apple Pay in the December quarter alone. Cook also noted that Apple Pay on the web has been a success with over two million small businesses now able to accept online invoice payments using Apple Pay via services such as Intuit and Freshbooks, and revealed that soon Comcast customers will be able to pay their bills online using Apple Pay. Mac also returned to growth in the prior quarter with the release of the new MacBook Pro models and generated its highest quarterly revenue ever. Cook noted that most customers in the quarter were buying their first Mac, with the majority coming from the Windows platform.

Cook also explained that this was the best quarter ever for the Apple Watch, and that AirPods are off to a “fantastic start,” highlighting how Apple is now offering a “rich lineup of wearable products” and he is very excited about the huge growth potential for wearables going forward. Cook added that Apple has continued to broaden its ecosystem to “more and more areas where people spend their time,” and highlighted how every major automaker is now committed to supporting CarPlay, with over 200 different models announced. Apple is also leading the industry by being the first to integrate home automation into a major platform, and the number of HomeKit-compatible accessories is growing rapidly. Cook also noted that Apple is “unmatched” when it comes to securing your home with HomeKit, and took some time to outline how he personally uses HomeKit in his own household.

During the Q&A portion of the call, Cook commented on what Apple is doing in its services business around the Apple TV and Apple Music, admitting that Apple has”put its toe in the water” in the area of original content with some podcasts for Apple Music, and is learning a lot about that business and thinking about ways they can play in that. Cook noted that Apple expects to accelerate more into this area as a result of cable bundles beginning to break down, and stated that he’s pleased with how the Apple TV has come along in the past year, and that Apple has some more things planned for it, and that it’s a clear platform for the company to build off of.

In light of many feeling that the smartphone platform has reached maturity, Cook was asked whether he feels that there’s still room for growth in the iPhone beyond iterative and form-factor changes, and whether there is anything Apple feels is coming that can truly surprise users. Cook responded that as far as he’s concerned, the smartphone is actually in the “early innings of the game” and with every year it becomes more and more integrated into people’s lives. Cook touched on HomeKit again and said he could have also talked more about things like health, CarPlay, and the use of the iPhone in the enterprise space, which is “growing significantly.” Cook concluded by saying, “when I look at all of these things, usage going up, app developers still innovating, we’ve got some exciting things in the pipeline.”

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Jesse Hollington

Jesse Hollington was a Senior Editor at iLounge. He's written about Apple technology for nearly a decade and had been covering the industry since the early days of iLounge. In his role at iLounge, he provided daily news coverage, wrote and edited features and reviews, and was responsible for the overall quality of the site's content.