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How the heck did Apple make so much money last quarter?

How the heck did Apple make so much money last quarter?

Inside Apple's bananas Q2 2021.

Credit: Apple

The last few years, Apple has been on such a ride that it can be hard to put it into proper context. Almost every quarter sets a business record. And yet this quarter, covering the first three months of calendar 2021, are something special.

I've been reading Apple financial statements and generating charts about those statements for the better part of a decade now. And this is the first time that I've looked at the numbers posted on Apple's website and thought that some sort of clerical error had been made. Perhaps a harried Apple accountant had gotten a little twitchy with their numeric keypad and put in a few extra digits here and there.

But no, it's true. Apple generated nearly $90 billion in revenue during the second quarter of 2021. Not only is that a whole lot of money, but it's just a couple billion shy of the amount of revenue it generated during the holiday quarter of calendar year 2019. That quarter set an all-time record for Apple, bested only by the holiday quarter of calendar 2020.

Apple's business is more seasonal than an outside observer might think. People buy a lot of iPads and Macs during the holidays, it turns out—and of course, the iPhone launching in the fall pours even more revenue into that bucket. Holiday quarters are the biggest and have been for ages now.

This quarter, this second quarter, this January through March quarter… it's the size of a holiday quarter. It's unprecedented. It's the third-largest fiscal quarter Apple has ever had.

Why did it happen? It's a confluence of a lot of different events. What Apple CEO Tim Cook said on his quarterly post-results conference call with financial analysts was that it reflected both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead.

iMac and iPad have their moment

It's hard to pick out one Apple product category for focus when they were all up, but I think the iPad and Mac deserve top billing. Mac revenue was $9.1 billion, up 70 per cent versus last year's second quarter and an all-time record. iPad revenue was $7.8 billion, up 79 per cent versus the year-ago quarter.

Obviously, the pandemic is a big part of this. Cook admitted that lockdowns and school and office closures have driven the need for devices at home. Presumably, the arrival of the M1 late in Q1 helped, too. The result, though, is worth admiring.

As Apple CFO Luca Maestri put it, The last three quarters of Mac have been the best three quarters ever in the history of the product. So we are experiencing an incredible level of demand, which certainly is favoured by the working from home and learning from home environment, but also by the incredible amount of new products and innovation that we put into the products that we launched during the last couple of quarters.

Alas, the iPad can't claim such records. In the very early days of the iPad (2012 through 2014), the iPad generated enormous sales figures for Apple.

So while the last two quarters of iPad sales aren't records, they are the two biggest iPad quarters in the last six years. And the last time the iPad sold better in a non-holiday quarter was eight years ago. iPad sales haven't quite hit those heights, but it's closer than anyone might have imagined even a couple of years ago, when iPad sales had bottomed out.


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