Apple made more money than ever, even with the supply chain crunch

Photo by Vjeran Pavic / The Verge

Apple has made a regular trend of announcing record-breaking quarterly earnings, especially in the company’s fiscal Q1, which includes the holiday shopping season. And Q1 2022 has managed to top them all: Apple just reported the biggest revenue for any quarter in its history. Driven by sales of the iPhone 13 lineup and a continued rise of its services business, Apple posted $123.9 billion in revenue with earnings per share of $2.10, handily beating Wall Street expectations of $118.66 billion and $1.89, respectively. Apple recorded a profit of $34.6 billion — also a record.

The iPhone enjoyed a supercharged sales quarter, no surprise given that it was a holiday period and the first full quarter of availability for the iPhone 13, 13 mini, 13 Pro, and 13 Pro Max. The iPhone unit took in $71.63 billion, up 9 percent over the year-ago quarter.

All of Apple’s other divisions were also up year over year, with the exception of the iPad, which was down by 14 percent and impacted by supply constraints. The Mac was up by 25 percent, services up by 24 percent, and wearables were up by 13 percent.

2022 is expected to be very busy for Apple in terms of new product releases. The company is rumored to be readying a new 5G-capable iPhone SE for as soon as next month. According to Bloomberg’s Mark Gurman, an updated iPad Air and potentially a revamped product in the Mac lineup — like a Mac mini or iMac running the M1 Pro chip that debuted in the 2021 MacBook Pro — could also be coming in the front half of the year. Just yesterday, Bloomberg revealed that Apple could soon launch a Square-like service that allows iPhone owners to accept contactless payments without any need for additional hardware.

Looking further into 2022, the company is also rumored to be working on a new Mac Pro powered by its own silicon. And following up on the third-generation AirPods released last year, next-generation AirPod Pro earbuds are also expected in the coming months alongside a redesigned iPad Pro and the usual iPhone refresh when fall rolls around.

Photo by Vjeran Pavic / The Verge
An upgraded iPhone SE with 5G is expected to be Apple’s first product launch of 2022.

But uncertainty surrounds the company’s long-awaited mixed reality headset, which will be Apple’s first major product in a new category since the Apple Watch in 2015. The latest reports suggest the VR / AR device might not launch until sometime in 2023.

Even as it marches on with product plans, Apple continues to struggle with the ongoing supply chain crunch. In the previous quarter, Apple estimated that it lost out on $6 billion in revenue due to supply chain issues and the semiconductor shortage. Shipping times for the 16-inch and 14-inch MacBook Pros have been hit particularly hard and remain lengthy, with delivery estimates of March and April for many configurations. It’s almost impossible to find the higher-end SKUs in stock at Apple’s retail stores — and that’s been the case since the laptops went on sale back in October.

Coinciding with today’s earnings, Apple CEO Tim Cook told The Wall Street Journal that he expects the situation to improve soon. “We saw supply constraints across most of our products,” he said. “We’re forecasting that we will be less [constrained] in March than we were in the December quarter.”

Outside of hardware, the company is facing greater and more frequent challenges to its strong grip over the iOS App Store; Apple has begrudgingly agreed to allow third-party payment options in South Korea and for dating apps in the Netherlands but has pushed back against similar pressures in Russia. In the United States, CEO Tim Cook is said to have personally lobbied against antitrust legislation under consideration in Congress that Apple claims could force it to allow software sideloading and compromise device security.

Speaking of software, before it released earnings on Thursday, Apple rolled out new betas of iOS, iPadOS, and macOS. iOS 15.4 will allow people to unlock their iPhone with Face ID while wearing a mask, while the delayed Universal Control feature is coming to iPadOS 15.4 and macOS Monterey 12.3.