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Apple Posted Solid Growth in Revenue and in Volume in Q1 2018, but Margin Dropped.

by Yiwen Wu | May 03, 2018

Apple posted a strong quarter in Q1 2018, with solid growth both in volume and in revenue. It beat industry’s expectation, but is in line with our forecast.

iPhone X remained the best-selling smartphone model this quarter, but consumer demand softened from a quarter ago. High price tag, lack of killer use case, and reduced hype are likely to be the reasons behind. We forecast that iPhone X shipment will drop significantly in Q2 2018.

Despite solid revenue growth, neither gross margin nor operating margin of Apple’s iPhone business grew this quarter. Apple blamed the unfavourable component cost environment, while we believe increasing sale & marketing expenditures are also a factor.

Looking forward, how many iPhone X and iPhones will be shipped in Q2 2018?  For iPhone total shipments, the biggest factor will whether Apple will launch a new iPhone SE model in June. We tend to believe Apple will launch lower price point devices to fuel unit growth and continue the impressive growth of the services business.

Our latest report Q1 ’18 : Apple : Revenue and Volume Grow but Margins Dropped has been published. WSS clients could access the report via this link.

iPhone India Photo

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