Apple Is Bruised but Not Rotten

Apple’s total revenue in the December quarter was $75.9 billion, up 2% year over year but at the low end of the firm’s previously forecast range, a rare miss by the firm. Revenue would have been up to $80.8 billion, up 8% year over year, on a constant currency basis. Apple sold 74.8 million iPhones in the December quarter, up by only 311,000 units or 0.4% year over year, with sales actually down on a sell-through basis to end customers. On the bright side, iPhone average selling prices were still spectacular at $691 per phone, up 3% sequentially, despite $49 of negative currency effects. We estimate that Apple sold about 5.5 million Watches in the quarter, which, if accurate, was softer than the sort of exponential growth we were previously expecting.

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