You may not have been able to visit your local Apple store at some points during 2020 due to the coronavirus pandemic, but that didn’t stop people from ordering laptops and iPhones online, and returning to stores when they reopened. The company reached $2-trillion in market capitalization this week, the first U.S. publicly traded company to cross the milestone. Apple was also the first company to hit a $1-trillion benchmark; a feat it reached in 2018. Just two years later the valuation of the Cupertino-based organization has doubled, amid one of the most uncertain periods in business on record.
Global iPhone revenue grew by 2% in the quarter ending in June, to $26.4-billion, surprising the company as much as investors. “In April, we expected year-over-year performance to worsen but we saw better-than-expected demand in May and June,” CEO Tim Cook said on the earnings call. “We attribute this increase in demand to several interactive causes, including a strong iPhone SE launch, continued economic stimulus, and potentially some benefit from shelter-in-place restrictions lifting around the world.”
iPad and Mac growth was also very strong, both achieving double-digit growth compared to the previous quarter. Cook noted that those results were particularly impressive given there were supply chain constraints for both products. “We’re working hard to get more iPads and Macs into customers’ hands as quickly as possible, recognizing how integral they have become to working and learning from home, providing entertainment and staying connected with loved ones,” Cook said.
Overall, Apple set a June quarter record of $59.7-billion, up 11% on the same period last year. June quarter records were set in all territories – the Americas, Europe, Japan, and Asia-Pacific. Revenue from products hit $46.5-billion. The Services division – consisting of advertising, Applecare, App Store, Apple Music, video and cloud services — generated a June quarter record of $13.2 billion, up 15% year-over-year. Cook also disclosed there was ‘elevated engagement’ on iMessage, Siri, and FaceTime. With regard to Apple TV+, Cook stated that production of TV shows has been impacted by COVID-19, and it is unknown when it will resume. “We shut down in the March time frame and are yet to really restart in a significant way, particularly for those that are shot in the L.A. area given the current status of the virus.”
Speaking to the opportunities that the Apple platform provides for small businesses and other organizations, Cook noted that an ‘independent economic group found that the App Store facilitated more than $0.5 trillion in commerce globally in 2019 alone.’ “Especially in a time of COVID-19, you can measure economic resilience in the ways in which the App Store supports remote ordering for restaurants, digital commerce for small businesses and an enduring entrepreneurial opportunity for creators and visionaries,” Cook said.
Apple CFO Luca Maestri discussed how Apple products are being integrated into new telehealth practices. “In healthcare, we’re seeing rapid acceleration of telehealth to support a more flexible model of patient care,” Maestri said on the earnings call. “Many hospitals, such as UVA Health, Rush University Medical Center, and UC San Diego Health are using apps on iPad and iPhone to help triage, monitor and care for patients who are at home. This helps free up hospital capacity to support patients who need inpatient care while enabling continued care for patients who do not require in-person visits.“
Maestri also announced a stock-split of Apple common stock that will take place next week. “Each shareholder of record at the close of business on August 24, 2020, will receive three additional shares for every outstanding share held on the record date.” The stock closed at $497.48 today, reaching an all-time high in anticipation of the upcoming split. At that rate, each new share will trade at $124.00 when the four-way stock split takes effect on August 31.