Apple hits record revenue as iPhone sales defy supply chain shortages

After ditching guidance at the beginning of the pandemic, Apple had plenty of reason to smile as it reported its single-largest quarterly revenue. Even in the face of pandemic uncertainty and supply chain constraints, the hardware giant blew past investor estimates, racking up an 11% growth in sales.

Things were rosy overall on the hardware front — save for iPad revenue, which failed to meet expectations and dropped 14% year-over-year. The iPhone experienced solid growth, following the late-September release of the iPhone 13 line. Sales hit $71.63 billion for the smartphone, a 9% y-o-y increase from $65.6 billion.

The results are made all the more remarkable given global supply chain bottlenecks and chip shortages. Tim Cook mentioned on an earnings call that the company expects supply chain issues to continue to ease.

Instead, the CEO simply noted, “This quarter’s record results were made possible by our most innovative lineup of products and services ever. We are gratified to see the response from customers around the world at a time when staying connected has never been more important.” He went on to discuss Apple’s ongoing work to become carbon neutral.

The news confirms what we’ve known for a while. Apple’s blockbuster smartphone quarter comes in large part thanks to its recent successes in China. Figures from Counterpoint Research put the company at the top of the market share list for the world’s largest smartphone market — no small feat, given the prevalence and popularity of companies like vivo, Oppo, Honor and Xiaomi, which took numbers two through five, respectively.

Huawei, meanwhile, continued to struggle even in its home country as sanctions block access to vital technologies. The news marks the first quarter in six years that the company has topped the chart in China.

Earlier this month, Canalys noted that Apple also rocketed to the No. 1 spot globally, as other manufacturers have continued to struggle with supply chain bottlenecks and chip shortage. The company saw a sizable increase over the previous quarter, which found it struggling to meet demand in certain markets.

While it remains true the supply chain constraints likely continue to present difficulty meeting demands in some markets, these have tended to disproportionately impact smaller manufacturers with less leverage among suppliers.

As mentioned, while the iPad fell short of the mark, Mac revenue jumped an impressive 25% from last year, hitting $10.85 billion, largely on the strength of refreshed M1 models, including the most meaningful updates to the iMac and MacBook Pro in years. Wearables, Home and Accessories, which includes the Apple Watch and AirPods, among others, grew to $14.7 billion, while Services hit $19.52 billion for the quarter.