The Most Profitable Holiday Season for Apple; Supply Shortages No Longer a Major Concern

No longer restricted by supply shortages that have affected the production of practically all smartphones all over the world, including iPhones, Apple demonstrated the best holiday season numbers ever.

Q4 2021 results published Thursday demonstrate Apple’s growth between 2019 and now, the ending of the global pandemic.

iPhone sales had been dragging two years ago, with consumers holding on to their devices for a longer time. However, at this point Apple can barely keep up with the consistently growing demand for the devices that are vital in the flourishing remote work era.

During a conference call, Apple’s Tim Cook reported that iPhones are enjoying the peak of their popularity. Macs and, to a lesser extent, iPads are also getting increasingly popular. With the iPhone at the helm, Apple reports over 1.8 billion units being used globally.

The pandemic-related chip shortage has a negative impact on the production of practically all electronic devices, and Apple is no exception.

However, the company has managed to navigate the shortfalls very efficiently, managing to sell 9% more of its devices for a total amount of $71.63 billion in October-December 2021 compared to the same period in 2020.

If all the chips and other components were to be obtained, the sales numbers would have been even more impressive. It was, in fact, a major issue in Q3, decreasing iPhone sales by approximately $6 billion.

These supply shortages were the most problematic for the iPad. Its sales dropped 14% from the year-earlier period., but the company management forecasted that these problems won't affect sales as radically during Q1 2022.

Despite the problems triggered by these shortages, Apple still came out with $34.63 billion in earnings, which amounts to $2.10  per share. Revenue increased by 11% to $123.95 billion.

Apple's achievements propelled the company's market value above $3 trillion for the first time ever in early January. Its stock price, however, has plummeted 13% since that peak due to concerns about a potential interest rate hike that may be implemented to halt the quickening pace of inflation.

Apple’s shares grew by over 5% after the company’s fiscal Q1 numbers were reported.

The supply issues plaguing Apple's devices have confirmed the significance of the services department, which operates on commissions from digital transactions through iPhone apps, as well as subscription plans: music, video and repairs.

Apple collects up to 30% in commissions from apps downloaded via the AppStore, which has been in focus of a major legal fight, and the potential reforms introduced in the US Senate that aim to break down the company's barriers preventing its customers from using other payment systems.

However, the services division is still currently on the rise. Its revenue in Q4 rose by 24% to $19.52 billion.

Many experts believe that Apple is moving towards yet another enormous money-making opportunity, namely, the introduction of an AR headset. It would allow to project digital images and info while its users interact with the environment around them. Apple never announced its work on this technology, yet its top managers have shared their enthusiasm for AR’s potential before, as well as during Thursday's conference call.

Unless derailed by further supply shortages, the headset release is expected later in 2022.