Apple Inc. CEO Tim Cook on Jan. 27 said he expects the company's historic decision to split with Intel Corp. in favor of making its own Mac computer chips will give Apple a competitive boost in 2021 and beyond.
Apple has started the two-year process of replacing Intel's x86 chips in its Mac laptops and desktop computers with Apple's first-ever M1 chip, a mobile processor similar to the one that currently powers Apple's iPhones and iPads. The M1 chip is designed to provide users with greater performance while conserving energy. Apple in November 2020 debuted the new MacBook Air, Mac mini and MacBook Pro models with the new M1 chip.
"If you look at Mac, the M1, I think, gives us a new growth trajectory that we haven't had in the past," Cook said a Jan. 27 earnings call. Demand for Apple's M1-based Mac computers has been "very strong" so far, he added.
"Certainly, if Q1 is a good proxy, there's lots of excitement about M1-based Macs. ... We're early days of a two-year transition, but we're excited about what we see so far."
Mac sales for the quarter ended Dec. 26, 2020, came to $8.68 billion, up from $7.16 billion in the same period a year ago. By comparison, sales for the iPad tallied $8.44 billion in the just-ended period, compared to $5.98 billion a year ago.
Executives on the Jan. 27 call noted both the Mac and iPad should continue to perform well, even once the surge in people working and learning remotely amid the pandemic stabilizes. "Part of [the growth seen for Macs and iPads] is work from home and part of it is just learning," Cook said. "But I think I wouldn't underestimate how much of it is the product itself on, in both the case of iPad and Mac."
In terms of the iconic iPhone, Apple tallied a "new all-time high" of 1 billion iPhone active users in the just-ended quarter, Apple CFO Luca Maestri said.
IPhone sales revenue for the quarter came to $65.60 billion, up from $55.96 billion in the year-ago period, driven by "strong demand" for Apple's new 5G iPhones, Cook said. Apple in October 2020 launched its first slate of 5G-capable iPhones — the iPhone 12, iPhone 12 mini, iPhone 12 Pro and iPhone 12 Pro Max — that are powered by a new, faster A14 bionic chip and include improved displays and cameras. The new iPhone lineup is priced between $699 and $1,099.
Though Apple did not provide specific guidance for its fiscal second quarter, Maestri forecast consolidated revenue growth to accelerate on a year-over-year basis. However, he cautioned growth in the company's services business could face a difficult year-over-year comparison given the surge in activity on Apple's digital services as pandemic lockdowns began around the world last year. Growth in the company's Wearables, Home and Accessories category will likely decelerate sequentially in the fiscal second quarter, Maestri said.
Net sales in the company's Wearables, Home and Accessories segment grew to $12.97 billion, up from $10.01 billion in the same period a year ago. Services net sales came to $15.76 billion, up from $12.72 billion a year ago.
Turning to financials, the company's total net sales for the quarter ended Dec. 26, 2020, jumped 21% year over year to $111.4 billion, up from $91.82 billion a year earlier. The S&P Capital IQ consensus estimate for Apple's fiscal first-quarter total revenue was $103.24 billion.
Apple reported net income of $28.76 billion, or $1.68 per share, for the just-ended period, up year over year from $22.24 billion, or $1.25 per share. The S&P Capital IQ consensus EPS estimate for the quarter was $1.41 both on a GAAP and normalized basis.
Apple's board of directors declared a cash dividend of 20.5 cents per share of the company's common stock. The dividend is payable on Feb. 11, to shareholders of record as of the close of business Feb. 8, 2021.
The company's shares were down in after-market speculation Jan. 27 as its earnings call came to a close.