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Apple quarterly report: Cupertino gets Chinese boost with strongest March ever

Apple has released its Q2-2015 financial results in a conference call, announcing profits and its strongest March quarter ever, despite headwinds. The company posted quarterly revenue of $58 billion (£38 billion) and quarterly net profit of $13.6 billion (£8.9 billion, or $2.33 (£1.51) per diluted share.

The conference focused on the performance of the iPhone, Mac and App store, largely ignoring the performance of the Apple Watch, which was only launched last week.

iPhone adoption rates are growing, as Tim Cook reported that customers are switching at a faster rate than previous cycles. 20 per cent of the user base has upgraded already and the iPhone led Apple's revenue by a large margin.

Macs have gained ground in the market with double digit unit growth - as opposed to the shrinking PC Market - and made up the next highest revenue stream for Apple.

The App store is also performing better than it ever has before; services were up 9 per cent compared to last year and 4 per cent compared to the previous quarter. Tim Cook cited it as a reason for the growth of Apple's European jobs on the continent.

Danielle Levitas, SVP of research and analysis at App Annie, commented: “Developers will welcome the news that Apple continues to perform well with strong global expansion of iOS via the incredible sales for the iPhone 6 and 6 Plus products in particular.

"Add to this that starting this quarter, developers have a new platform to expand into - the Apple Watch - and together we see this as a sure fire sign that the app economy is still nascent and poised for more incredible growth. These results reinforce the expanding opportunity for developers and their increasing potential to reap significant financial rewards from the growing iOS user and device installed base.

"Although Google Play’s worldwide downloads in Q1 2015 were approximately 70 per cent higher than the iOS App Store, according to our data, the iOS App Store’s worldwide revenue in the same period was about 70 per cent higher than on Google Play, demonstrating that iOS developers continue to monetise their apps more effectively."

Apple Pay is expanding, with Best Buy and 50 major hospitals accepting contactless payment later in the year. Overall, the number of locations accepting Apple pay is set to triple in 2015.

The Apple Watch is obviously still in its opening phases, with the company looking for an expanded market as it learns what customers expectations and preferences are. As of the moment, the Apple Watch is performing under the company average, but Apple appears to be treating it as a learning phase.

Tim Cook briefly mentioned other projects. Over 60,000 iOS users have enrolled in Apple's Research Kit and over 1000 researchers have contacted the company. Apple is opening data centres in Ireland and Denmark, spending nearly $2 billion (£1.3 billion) on the projects.

Apple's share is growing in Greater China, up 71 per cent year over year, with a record setting revenue from from the region. iPhone sales lead the way, with Mac sales also up 31 per cent whereas PC sales contracted by 5 per cent. The App store has grown over 100 per cent year over year in China, with Tim Cook stating it was driven by a growing middle class.

Apple's revenue was largely from international sales at 69 per cent, driving growths for the company compared to the year previous. The Gross margin was up more than a full per cent compared with the year previously, from 39.3 per cent to 40.8 per cent.

So all in all, not a bad few months work for the Cupertino titan.

The rebroadcast of the conference call will be available for two weeks and the unaudited numbers and expectations for later this year are available here.