At Apple’s Q2 earnings call, CEO Tim Cook elaborated on the company’s future plans, products and services performance during COVID-19 pandemic. With Apple’s workforce working on products remotely, Cook explained the positive impacts of the coronavirus related lockdowns on services like Apple News and FaceTime, and its negative impact on iPhone and wearables sales.
New Products in the Pipeline
Dismayed by the current health crisis but not defeated, Cook told the audience during the Q2 2020 earnings call that Apple is working on development of the ‘best’ new products. With making conducive working from home adjustments, Apple is continuing as planned to deliver new products. He quoted the release of iPhone SE and Magic Keyboard in April as evidence that Apple is functioning as normal, and will continue to give the best options to its customers for their needs, especially in this unprecedented time, like venturing more into health related apps.
iMessage, FaceTime and Apple News set new records
Tim Cook said that the daily use of iMessage and FaceTime services has increased to a new all-time high record during the COVID-19 pandemic. Apple News increased to 125 million monthly users, despite being available in only 4 markets, during the pandemic as the need for credible news sources for coronavirus updates has increased.
Furthermore, Cook shared the downloads and visitor numbers for Apple’s COVID-19 app and website. He said the screening app has more than 2 million downloads, and the website has been visited 3 millions times so far.
According to Apple’s CFO Luca Maestri, the revenue forecast for Q3 2020 is very uncertain in terms of providing any useful data to investors. Therefore, Apple is not providing any financial guidance in terms of revenue forecast to investors for Q3 2020. Maestri explains:
“We really didn’t feel there was enough visibility and certainty to provide guidance and frankly we didn’t want to do something that didn’t have much value for investors.”
The company shared that in Q2 it earned $58.30 billion in revenue. As per the figures released, Apple did better than last year – despite the ongoing pandemic. However, the next quarter is going to be very uncertain for the company.
Apple’s basic revenue forecast for Q3 2020
Apple provides investors with a wide variety of guidance points for investments. These points include revenue, gross margins, expenses for operations, etc. The company provided some very basic guidance for Q3 2020. Apple’s basic revenue forecast predicts that iPad and Mac sales will improve in Q3 2020.
“A part of it is probably the consumer behavior of knowing this is going to go on for a little while longer and, getting some devices and so forth lined up to work at home more. In particular, as I think Lucas shared, we believe that iPad and Mac are going to improve on a year over year basis during this quarter.”
On the other hand, iPhones and Wearables revenues will go down. Probably because of change in device preferences during the pandemic. Reports say that Internet usage on big screen has increased, with a simultaneous decrease in small screens like the iPhone. Therefore, Cook predicts that iPad and Mac sales will grow as people are working and learning from home due to the ongoing pandemic.
After a rough month in March, most tech stocks are returning to their pace in April. Apple is in a difficult position due to its complex supply chain. However, the tech giant is prepared for any outcome that it may face due to the ongoing pandemic. Apple has also lowered its internal targets as the global smartphone market shrinks due to COVID-19.