The Apple of your eye: Outlook good for Apple earnings report (Part 12 of 12)
A number of data points suggest that iPhone 6 and iPhone 6 Plus are huge successes
Apple (AAPL) depends heavily on its iPhone business growth. As the chart below shows, iPhone contributed about 57% of Apple’s revenues in fiscal 2014, up from 55% in fiscal 2013. This contribution could definitely increase when Apple announces its 1Q15 results on January 27. That’s because all data points indicate that Apple has gained substantial smartphone market share at the expense of Google’s (GOOG)(GOOGL) Android and Microsoft’s (MSFT) Windows operating systems.
For example, according to a report from Kantar Worldpanel, in the US, Apple’s iOS share increased from 30% in August 2014 to 47% in November. Another Counterpoint report suggests that iPhone 6 and iPhone 6 Plus gained substantial market share in China, Japan, and South Korea. Finally, Flurry Analytics reports that iPhone accounted for 51% of new device activations worldwide in the weeks leading up to and including Christmas day.
Mac and App Store showing strong growth
Apple continues to gain share in the worldwide PC market and now ranks number five. Leading the PC market currently are Lenovo and HP (HPQ). Apple is gaining market share despite strong efforts from Microsoft and Google to win more of the PC market.
Microsoft’s new strategy is to give away Windows 8 license-free to low-cost PC and tablet manufacturers. Microsoft hopes to compensate with revenue from other services such as the Bing search engine, Outlook, etcetera. Similarly, Google is also trying to popularize its Chromebook line of PCs by making them cheaper for consumers.
Apple’s App Store is doing well. According to a recent Apple press release, the billings from its App Store rose by 50% in 2014, and apps generated over $10 billion in revenues for developers.
iPad business continues to decline
Apple’s iPad business is still declining despite a number of efforts to revive sales. A few months ago, it launched two new iPads—iPad Air 2 and iPad Mini 3. Apple also launched a SIM card for these new iPads and partnered with IBM (IBM) to improve its visibility among enterprises. Regardless, Apple may again report a substantial decline in iPad sales when it reports its fiscal 1Q15 earnings on January 27.
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