Return to iPhone growth drives record Q4 for Apple


Samsung’s Note 7 recall benefited Apple’s iPhone sales

Apple reported record fourth quarter 2016 revenues of $78.35 billion, shipping 78.3 million iPhones in the quarter and reported record services revenues, according to IHS Technology.

Full year iPhone shipments were down in 2016, but the launch of the iPhone 7 and 7 Plus helped Apple return to growth in the fourth quarter, noted Jack Kent, director at IHS Technology.

He said: “The strong performance shows how the iPhone remains Apple’s growth engine. iPhones accounted for 69% of revenues, the highest share since the first quarter 2015. It also validates Apple’s trade-off decisions regarding water resistance, removing the headphone jack and different camera technology on the 7 and 7 Plus. Apple’s results also indicate a higher iPhone average selling price, showing a shift in popularity towards larger screen Plus models.”

The Japanese market was particularly strong for Apple, said the research firm. New factors such as supporting the local FeliCa contactless payments technology, popular local device features such as IP67 water resistance, and improved camera performance have been well received, said Kent.

Meanwhile, Apple’s biggest market, the Americas, returned to growth after declining for four consecutive quarters. Americas’ revenue was up 9% over the previous year.

“Apple benefited from Samsung’s Note 7 recall,” added Kent. “The absence of the Note 7 helped the competitive position of the iPhone 7 and 7 Plus in the premium segment in North America.”

Apple’s services revenues – driven by record App Stores sales, Apple Pay, content sales and cloud services – also reached a new high in terms of overall revenues, said Kent. “But, the proportion of revenues fell because of the iPhone dominance,” he concluded. “Apple’s growing installed base of devices means that services represent a valuable on-going revenue stream for Apple beyond device sales. The smartphone market is becoming increasingly concentrated on the big three device makers; Samsung, Apple and Huawei.”


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