about 2 years ago • 3 mins
Apple reported better-than-expected results late on Thursday, so at least the tech giant will be able to foot the bill for its fancy new payments service.
What does this mean?
Apple’s fourth quarter is always an important one, not least because it reflects sales during the all-important holiday period. Well, those last-minute spending sprees went down a treat: iPhone sales – the company’s biggest money-spinner – were up by a better-than-expected 9% versus the same time in 2020. In fact, sales of almost every one of Apple’s products grew from the year before, despite the supply chain problems. And then there’s its highly profitable services segment: revenue from the home of Apple TV, iCloud, and Apple Music climbed by a better-than-expected 24%, which helped bring in a record total revenue of $124 billion.
Why should I care?
For markets: The smartphone market is shrinking.
All this growth had plenty to do with China: data out earlier this week showed that Apple became the biggest smartphone seller in the country for the first time in six years last quarter. The tech giant boosted its Chinese sales by a third, helping it claim a record 23% of the country’s smartphone market even as that market shrank. That’s a trend Apple might want to get used to: analysts expect rising prices, shortage-stunted supply, and consumers’ increasing tendency to delay phone upgrades to drag on smartphone sales across the world.
The bigger picture: Pay Apple.
Apple’s got a few tricks up its turtleneck to offset that potential slowdown, including pushing further into the payments space. Business owners currently need to use their iPhone alongside a payment machine to process transactions, but Apple’s reportedly planning a new service that would let them use – you guessed it – just the iPhone. That’s worrying news for major payment providers like Block that could see demand for their terminals drop off, which might be why investors sent the company’s shares down after the announcement.
Keep reading for our next story...
Tesla reported better-than-expected quarterly results earlier this week, and the electric vehicle (EV) giant didn’t even need to shift out of low gear.
What does this mean?
Tesla made 71% more from EV sales than it did the same time in 2020, which investors might’ve seen coming after the company announced earlier this month that it delivered more of them than ever last quarter. Thing is, it didn’t just sell more, it made more too: the EV giant’s profit soared by 760% to hit a new quarterly record. And it did it all with one hand tied behind its back: it’s been affected by shortages of chips and other key parts just like other carmakers.
Still, those shortages are taking and will continue to take their toll, so Tesla has decided to hold back on releasing any new models this year – including the Cybertruck, which is as highly anticipated as it is unpleasant to look at. Record results be danged: investors initially sent the company’s stock down 5%.
Why should I care?
The bigger picture: Tesla’s backing China.
Tesla’s still confident it can hit its goal of delivering 50% more vehicles this year, and the shoe certainly fits: analysis from BloombergNEF estimates that global EV sales will be nearly 60% higher this year than last. And since China – the world’s biggest EV market – is expected to make up over half of all those sales, it’s no wonder Tesla’s been upping its investment in the country.
Zooming out: All for one, one for all.
Tesla is such a powerhouse on its own that Renault, Nissan, and Mitsubishi announced on Thursday that they’re teaming up: the three carmakers are jointly investing $26 billion into EVs over the next five years, in hopes of sharing both expertise and expenses. But not everyone is convinced: some analysts think that the companies’ non-EV businesses will have to start generating a lot more cash if they want to foot the bill on those lofty ambitions.
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