On October 3, discount stock broker Upstox announced that it had completed a buyback of 5% of former Tata Sons chairman Ratan Tata’s equity in the business, giving him a 10x return on his initial capital investment as realized.
Based on our most recent round valuation of $3.5 billion, Mr. Tata’s interest in Upstox has generated an astounding 23,000% return on the initial investment in 2016. According to a press release shared by the company, this accomplishment is a testament to our commitment to creating value for all parties involved, including our partners, investors, and most significantly, users.
Upstox Wealth Provides Easy Access to the Best Financial Tools and Advice
According to Upstox cofounder Kavitha Subramanian, the platform is especially honored that Mr. Tata, a well-known and respected person in India, has played such a significant role in the company’s development. He gave Upstox a lot of early support, which was a major vote of confidence in the company. His challenge to the company was straightforward but impactful: How can the company provide every Indian with the same excellent wealth advice that prosperous folks receive? Everything we’ve done at Upstox has been driven by this question.
That vision served as the impetus for the development of Upstox Wealth, a platform that is intended to provide all Indians with access to the most effective financial tools and guidance, irrespective of their background or investment size. Firm thinks that everyone, not just the wealthy and privileged few, should have the chance to increase their wealth. Its goal is to provide all of its investors with significant returns, and it is happy to report that it has been able to reimburse a portion of Mr. Tata’s investment.
Tata Being a Driving Force
The corporation claims that even after reaching the predetermined targets, Mr. Tata still owns the bulk of his shares in the company, demonstrating his ongoing support for the firm’s goal. His encouragement keeps the company going, and we’re steadfast in our resolve to give every Indian access to excellent financial management. Until everyone gets access to the resources they need to secure their financial future, we won’t give up, the company stated further in the release.
About Upstox
RKSV Securities operates the online investment platform Upstox. It is a financial service provider registered with SEBI. RKSV provides online trading for mutual funds, commodities, currencies, stocks, and Demat accounts. Upstox provides traders in the Indian stock market with a quick, dependable, and user-friendly trading platform.
Upstox provides budget-friendly trading services. The consumer receives the equity delivery (cash & carry) trade at no cost. Orders placed in this sector are not subject to brokerage fees. Upstox imposes a flat brokerage fee of INR 20 per trade for all other trading categories on the exchange. It offers its clients a top-notch trading platform and tools. This covers Algo Lab, Upstox Pro Mobile, Upstox MF, and Upstox Pro Web, among others.
We often come across the question of whether e-commerce or retail is best for a business. E-commerce is a replica of business that enables individuals and companies to sell their services or products via the internet. On the other hand, retail refers to the brick and mortar businesses, in which individuals sell their goods or services from person to person in shops, malls, and localities.
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According to Statista 2021, total retail sales, both online and offline, amounted to 24.2 trillion USD, out of which 19.1 trillion USD was generated by the brick and mortar retail channel and around 4.9 trillion USD was generated by the eCommerce sales channel. In the same year, global retail sales accounted for a growth of 9.7% as a whole and eCommerce accounted for around 19.6% of total retail sales.
The digital form of business has seen a great increment specifically in this pandemic. But at the same time, the heavy revenue generated from retail cannot be ignored. In this article, we will discuss different factors that will help you know what is best for your business between eCommerce and retail.
Retail Ecommerce Sales Worldwide from 2017 to 2022
In the following points, we will discuss a comparison between eCommerce and retail from different perspectives:
Which Has Lesser Prior Investment?
Ecommerce Starting an eCommerce business may sound like an expensive process but with proper planning and execution, one can start running it on a budget. The investment required to start your eCommerce business in India is nearly 5-10 lakh rupees. It includes building your business website, hosting, domain, sales and management tools, web development, and advertisements.
Retail Investment in setting up a retail store can be an expensive process. A retail store has to invest in various things before selling its product. These include building, buying, or renting a store, paying license fees, hiring staff for multiple positions, paying location tax, investing in filling up the store with sufficient items to attract a customer, and other necessary resources relating to business and government. All such expenses make setting up a retail store far more expensive than starting an eCommerce store.
So, comparatively, the cost of investment is lower in the case of eCommerce than in retail. The advantage of owning an eCommerce store is that it reduces the cost of setting up a brick-and-mortar store or hiring delivery staff. This is because eCommerce stores send their manufactured products to branches such as Amazon, FedEx, Ship Bob, Flipkart, etc. for order fulfilment. After this, it is the responsibility of these branches to pack, track and send the order to the buyer.
Ecommerce It is easier to maintain eCommerce compared to a retail store. But there are still some complications that need to be checked from time to time so that the store can run smoothly. For example- you need to maintain a warehouse or any proper space to keep the products safe and accessible for dropshipping. Since you are not directly connected with your customers, you will have to keep a check on analytics to track customer experience and discover their new tastes and likings. You will also need to keep a check on the timing of product delivery to avoid negative feedback from customers.
Retail The retail business is considered to be a bit more complicated in terms of maintenance. This is because for various reasons like there is a need to maintain a proper brick-and-mortar store and inventory, and maintenance of an adequate communication balance on both sides in real-time with suppliers and customers. Also, you have to keep a regular check on your staff if they are handling the customers politely. You will have to train them and make them more knowledgeable about the services and products you are offering so that they can deal with the customers pleasantly and accurately.
It is easier to modernize the stock in an eCommerce store. But this task becomes pretty difficult with retail stores as for updating products, you need to set up meetings with suppliers now and then. So, in case of ease of maintenance, eCommerce is a better option for your business.
Share of consumers going to brick and mortar stores by country in 2021
Which Has Better Profitability in Future?
Ecommerce With eCommerce comes a great benefit which is unlimited access to customers. Once you are over the internet, there is no limit to the number of people you can reach. Ecommerce allows you to showcase your products and services to a large number of people, therefore, no limitation to any particular locality. Moreover, you can always expand your business and attract new customers via smart and modern marketing techniques. These include offering free shipping, discounts, gift cards, reward points, etc. All this ultimately ensures better sales and thus, better profits.
Retail Retail stores do not have very wide access to the customers as they have limitations due to their fixed location. However, this does not mean that there are no benefits of a retail store. Even in today’s time, many customers do not feel satisfied until they can touch and feel the products themselves. So, the customers who are still skeptical about online shopping contributes to the sales and profits of retail stores. Moreover, there are fewer chances of online fraud with retail shops, as the customer doesn’t need to provide their personal information including emails, mobile numbers, bank details, etc.
In this case, eCommerce will be the clear winner because the products and services of eCommerce stores are visible to a huge audience which makes for a large potential customer base and thus, better sales and profits.
We compared e-commerce and retail stores based on investment, performance easiness, and profits obtained. Although there are factors like trusted quality and physical interaction that make retail stores better than eCommerce ones. But after making an overall comparison and looking at the future of the digital world, we concluded that eCommerce stores are the best way to expand your business and earn more profit in the future since it offers a wider reach with less investment.
However, you can also take another way which is you can opt for omnichannel retail as it allows you to buy products either online or physically through the real stores to keep your customers satisfied in all the possible ways.
FAQs
What is the difference between eCommerce and retail?
Retail is something that can be conducted in a brick-and-mortar store, online, between persons, or through direct mail. However, eCommerce refers to electronic commerce which means commercial transactions that are conducted only through the internet.
How owning an online store is better than physical stores?
Owners of the online stores can sell and ship their products and services to a large number of people with fewer investments as buying a website is easier and more economical than buying a physical store.
What is the biggest challenge faced by eCommerce?
One of the most significant challenges faced by eCommerce is the security issue. Ecommerce involves a great deal of personal information and even a small technical issue can create huge damage to a business’s operations and image.
What is a retail store?
The most common example of a retail store is the conventional brick-and-mortar stores like Walmart, Best Buy, etc. However, retailing as a whole includes goods or services sold through stores, kiosks, or even on the internet.
The Casual dining chain Barbeque Nation had posted a profit in the quarterly earnings. The restaurant chain is well known for its buffet business model which focuses completely on dine-in. Let’s look at how Barbeque Nation managed to increase its profit amidst the pandemic and lockdown in the major cities across India.
On 24 May 2021, Barbeque Nation had projected a profit of INR 6.1 crore for the March quarter when compared to a loss of INR 27 crore in the previous year. There was a 19 % increase in the revenue from operations of the company which amounted to INR 190 crore.
The operating profit or the EBITDA of the company had seen a year on year increase of 128 % with margins of 24.8 % which stood at INR 56 crore. The important point to be noted is that the chain’s delivery revenue had seen an increase of 471 % which amounted to INR 28.5 crore.
Reason Why Barbeque nation witnessed profit even during the pandemic
The Barbeque-Nation Hospitality has developed an integrated digital ecosystem which had proved to be beneficial during the pandemic. The company has been able to widen its reach and capture new customers as they have invested in their delivery with their dine-in business model.
The company had focused on continuously investing into the digital platforms of their business which provided the firm with an additional revenue source. The company’s own digital asset contributions had provided a revenue of 24.7 % and the delivery business has grown 6 times compared to the previous year.
Yearly Net sales of BARBEQUE-NATION HOSPITALITY LTD
How did Barbeque nation survived during the pandemic
The managing director of Barbeque Nation Hospitality Kayum Dhanani had conveyed that this year has beenchallenging for the restaurant chain due to the lockdown in many cities but they have adapted to the lockdown and restrictions by introducing a new product called Barbeque in a box.
He said that the product was introduced keeping in mind the pandemic and the lockdown. He added that this could become a successful product as they have a strong digital presence in their own app as well as third party websites and operators.
The CEO of the company had commented that amidst the lockdown and the pandemic restrictions Barbeque Nation has emerged to come out of the difficulties faced. He added that as the restrictions have been reduced and the stores being opened there have been customers coming into the outlets as well as the delivery of products going on hand in hand.
He added that the restaurant chain would focus on building the delivery business and it is expected to grow double by the end of 2022.
FAQ
Who is the CEO of Barbeque Nation?
Rahul Agrawal is the CEO of Barbeque Nation.
Who is the owner of Barbeque Nation?
Kayum Dhanani is the owner of Barbeque Nation.
Is Barbeque Nation an Indian company?
Yes, Barbeque Nation is an Indian company.
Conclusion
Barbeque Nation is planning to continue its position as a casual dining and delivery business with cost optimization, growth in delivery segment, strong cash flow segment and market penetration strategy. The top priority of the company is to provide maintain employee wellbeing and the safest environment for the guests.
CEAT is an Indian based Tyre manufacturing company. The company is owned by the RPG group. The CEAT company was founded in Italy in the year 1924. The company has its headquarters in Mumbai, India. CEAT is considered to be the leading tyre manufacturer in the country with a global presence.
CEAT manufactures tyres for trucks, busses, passenger cars, two wheelers, earth movers, light commercial vehicles, tractors, auto rickshaws and trailers. Let’s look at the reason behind the growth of the company’s profit even though the driving and riding of vehicles in the country has reduced.
On 4 May 2021, CEAT Ltd which is a company under RPG group had announced that the company has achieved a net profit of INR 132.34 crore during the Q3 which was ended on 31 December 2020. The net profit has been reduced to around 27.35 % when compared to the previous quarter of the same fiscal year.
The company had achieved a net profit of INR 182.8 crore in the Q2 of this fiscal year. CEAT Ltd has seen an increase in its revenue from operations for the Q3 of this fiscal year of INR 2,221 crore when compared to the Q2 of the fiscal year which was INR 1,978 crore.
When compared to a year-on-year basis the profit of CEAT tyres has seen an increase by INR 152.07 % compared to the previous year’s quarter’s INR 52.5 crore. The revenue from operations has also seen an increase on the year-on-year basis of around 26.08 %. The revenue from operations in the previous year was INR 1,761.77 crore.
Kumar Subbiah who is the CFO of CEAT Limited conveyed that the Tyre manufacturing industry is facing an increased demand with a robust demand in the replacement market. He added that the growth of the company in the last quarter of this fiscal year will largely be because of the demand by the replacement market.
He added that the company despite having a not so good quarter has grown the most in past nine months when compared to the same period during the last year. Compared to last year, the quarter 2 of this fiscal year has seen a growth of around 14 % and around 27 % in quarter 3 compared to the last year’s quarter 3 growth.
Kumar Subbiah said that for the Q4 the company is expected the demand to increase in most of the categories. He added that in the OEM sector the demand for some categories has come down after the festival season.
The company wants its growth to be driven largely by the replacement market which should be followed by the OEM. He said that around 15 % of the company’s revenue comes from exports, around 60 % through the replacement market and around 30 – 35 % from the OEM sector.
The company said that going forward it would be looking to focus on the passenger sector which will be completely on the passenger car and two-wheeler tyres.
He said that the company’s investment in Chennai and Nagpur factories is completely concentrated and directed towards the passenger segment.
Focus Markets of CEAT
The company said that it would focus on the North American and the European market in the coming years. The CFO added that the company’s presence in the European market has been increasing and the company is working towards increasing its presence in North America.
He added that there are a lot of queries from different countries that are looking to reduce Chinese manufacturers and enquiring whether India could start producing it locally and supply the required tyres to them. He added that, India is in a great position to take the advantage of the situation.
FAQ
Where are CEAT Tyres made?
Ceat tyres currently has 4 manufacturing facilities at Bhandup Nashik Nagpur and Halol and is setting up a new facility near Chennai.
When did RPG acquire Ceat?
RPG group acquired CEAT Tyres of India in 1981.
Who is Radha Goenka?
Radha Goenka is the Director at RPG Foundation.
Conclusion
CEAT had planned to invest around INR 800-900 crore this fiscal year but due to the global pandemic and the slowdown of the economy they had to cut it down to INR 550 – 600 crore. The company is planning to spend more in the next fiscal year as there is some traction and the sales are expected to increase this year.
Reliance Industries which is led by Mukesh Ambani has recorded a rise in its profit of up to 35%. Reliance is one of the leading companies in the oil and telecom sector in the country. The telecom sector has been growing under the brand name Jio and had created a disruption in the market at the time of its launch. Let’s look at the financial results of Reliance Industries for the end of the financial year 31 March 2021 and the reason for the rise in profits.
Reliance Industries is an Indian based multinational conglomerate. The company was founded in the year 1973 and has its headquarters located in Mumbai, India. The company provides services across the globe and is the largest publicly traded company in India.
Some of the products and services of Reliance Industries include Petroleum, Natural Gas, Textiles, Petrochemicals, Telecommunications, Retail, Television, Media, Entertainment, Financial services, Music and Software.
Reliance Industries owns a lot of subsidiaries which include Jio Platforms, Reliance Retail, Jio Payments Bank, Reliance Petroleum, Alok Group, Network18 Group, Reliance Foundation and the IPL team Mumbai Indians.
Reliance Industries which is an oil to telecom conglomerate reported a rise in its profit for the end of the year which ended on 31 March 2021 of about 34.7 % increase at INR 53, 739 crores. The company led by Mukesh Ambani had seen a net profit of around INR 39, 880 crores at the end of the previous financial year 2020.
The revenue generated by the company for the FY21 is around INR 5.39 lakh crore which is around 18.3 % lower than INR 6.60 lakh crore. Total income of the company reviewed under the fiscal fell around 20% from INR 6.26 lakh crore to INR 5.03 lakh crore which was recorded at the fiscal which ended on 31 March 2020.
This was conveyed by Reliance Industries on 30 April 2021 during a Regulatory filing. There was also a decline of around 4.6 % in the FY 21 in the Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) of the company which stood at INR 97, 580 crores.
The cash profit for the fiscal under review has seen an increase of around 18.8 % which stood at 79, 828 crores.
The net profit of the company for the March quarter of FY 21 had seen an increase of around 129 % year on year from INR 6, 546 crores to INR 14, 995 crores. The revenue for the quarter had also seen an increase of around 13. 62 % compared to the previous year from 1.52 lakh crore to 1.72 lakh crore for the current year.
The EBITDA of the company during the March quarter of FY21 saw an increase of 1.9 % month on month which was around 26, 602 crores. The cash profit of the company had seen a rise of around 6.5 % for the quarter ended on 31 March 2021 which is INR 22, 746 crores.
Reliance Industries had said that its non-convertible debentures (NCDs) outstanding as of 31 March 2021 were around INR 66,665 crore in which INR 13,351 crores are secured non-convertible debentures.
Reliance further added that the secured non-convertible debentures of the company which is recorded at INR 13,351 crores for the year ended 31 March 2021 are secured through movable properties by the way of its first charge.
Mukesh Ambani who is the chairman of Reliance Industries conveyed that they have seen a vigorous growth in the O2C and retail segment of the business and a strong growth in the Digital Services in their business.
The growth of O2C earnings was supported through the sustained high utilization rates across sites, transportation fuel margins as well as improvement in downstream products deltas. He added that during these challenging times the consumer business of Reliance Industries has proved to be a physical and digital lifeline for the nation.
FAQ
What is the annual profit of Reliance Industries?
The annual profit of Reliance Industries is 1,15,461 CRORE.
How many companies Mukesh Ambani have?
Mukesh Ambani have 7 companies under him.
Is Jio under Reliance Industries?
Yes, Reliance Industries wholly owns subsidiary of Reliance Jio Infocomm.
Conclusion
Mukesh Ambani-led Reliance Industries has added around 75,000 jobs during the Covid pandemic while ensuring the health and safety of the employees. Reliance Industries also announced a dividend of INR 7 per share.
In the first quarterly results of the leading lubricant player Castrol India, there was a huge rise in their profit and almost doubling of their net income compared to the previous year. It was announced during the company board meeting which was held on 26 April 2021. Let’s look at the reasons why Castrol India saw a huge profit in the Q1 of 2021.
Castrol India is an automotive and industrial lubricant manufacturing company. The company owns around 20% of the market share in the overall Indian lubricant market. The company was founded in the year 1910 and has its headquarters located in Mumbai, India.
The company comes under the oil and gas industry. Some of the products of the company include Oil, petroleum, petrochemical and lubricants. In India, Castrol India is the 2nd largest manufacturer of automotive and industrial lubricants.
In various parts of the country, there has been a slowdown in the industrial activities due to the second wave of the pandemic. The company has said that there have been disruptions in the supply of base oil, availability of raw materials and certain other challenges such as logistics and rupee depreciation.
On 26 April 2021 during the board meeting of Castrol India, the company had announced that its net income had more than doubled itself compared to the previous year. The first quarter net income for the month of January to March was about INR 243.6 crores against the previous quarterly results which were about INR 125.2 crores.
The revenue of the company had grown to INR 1,138.7 crores in the first quarter from the previous year of INR 688 crores. The revenue of the company for the previous year which ended in December 2020 was about INR 2,996.9 crores and the net income of the company was around INR 582.9 crores.
For the first quarter of 2021, the company’s revenue from operations has seen a growth of around 66% which amounted to INR 1,138.7 crores and Castrol India had seen their profit grow to more than double to INR 243.6 crores compared to the previous quarters INR 125.2 crores.
The quarterly results were said in a statement by the Managing Director of Castrol India, Sandeep Sangwan.
One of the main reasons for the increase in profits and the net income of the company is due to its exponential growth of the revenue of Castrol India. The Managing Director Sandeep Sangwan said that, the good numbers that were seen in the quarterly results were mainly due to the focused investment activities, actions and the interventions made by the company during the second half of 2020.
The above set of actions included the steps such as the building of the brand, corrective pricing, Increasing the marketing and spending on advertisements for building brands and the introduction of new products.
The achievement of the huge profit has also been supported by the improvement according to the trends and demand especially in the sales of SUV and tractor during the first quarter of 2021.
He said that the increase in cash from operations that is INR 269 crore in the first quarter of 2021 was mainly due to the implementation of a cost efficiency programme and judicious working capital management. The cash from operations of Castrol India is equivalent to 1.1 times of the net income.
Castrol is a U.K.-based producer of industrial and automotive lubricants for a global market.
Who is Castrol oil owned by?
Castrol is a wholly-owned subsidiary of BP PLC.
What does BP stand for now?
BP stands for British Petroleum Company Limited.
Conclusion
The covid-19 pandemic has made it hard for most of the industries and Castrol India has also conveyed that the second wave will have an adverse impact on their demand and supply. This may be seen in the further quarterly results announced by the company.
India is one of the largest populated countries with over 1.3 billion people in the world with the biggest untapped domestic markets. Even this year, (2021), the Indian government has planned to spend $23.7 billion on building the transport infrastructure of which a huge part of the money would be invested in building airports. The aim is to comfort travelers by having easy access to airports as well as having efficient connectivity across the nation. This will also help increase the number of travelers to India and the travel and tourism of our country will continue to grow.
For Indian airlines this can be a boon to earn money, however, this is yet not the case. The airline companies in India do not have good earning sources due to many factors some of which are high operational costs, high fuel costs, taxes, etc. Due to such reasons, the airlines have started cutting costs in order to save money as well as earn profits. We’ve listed some strategies that the airline companies use to make profit below.
1. Overcharging for Overweight Luggage:
Overcharging for extra luggage is a good profit margin for Airlines
Airline companies want to save costs wherever possible. They earn through different ways as well and one of the most effective ones is to charge for overwight luggage. If any passenger crosses the weight of the luggage, the person will have to pay an extra amount.
2. Chargeable Food and Drinks:
Earlier many airline companies had tie-ups and partnerships with the restaurants here. The high-quality cuisine added more value to the passenger’s experience. After the Covid-19 pandemic hit hard, most companies have started taking extra caution money along with the normal food charges. Also, the companies who gave food and drinks complimentary have stopped these services so that the staff and passengers can be contactless.
3. Crammed Seating:
Often to save money the airline companies make the aircraft in a way where there is little or no space for a person to have comfort while traveling. In the same space, more people are accommodated.
Earlier, for long route flights and journeys, the passengers would get amenities like blankets and pillow to sleep, however, to save money, these companies have cut-down on these services and have now made them chargeable.
5. Optimized Allocation of Resources:
When the allocation of resources i.e. staff and equipment is deficient the airline companies need to pay a high amount of money. It is very important that the airline company uses optimization techniques for the robust allocation of resources.
6. Selecting Routes that have more Traffic:
Airlines take longer routes to take up more passengers
A lot of times when there is less number of passengers traveling to a particular destination, the flights tend to get canceled or the passenger’s tickets are upgraded. At such times the airline companies select routes where there is scope of picking up more passengers, so that the company gets little traffic.
7. Increasing Fares during Festivals, Holidays, and Weekends:
Even when the airline companies want to maintain steady airfare rates, they aren’t able to. During the times of festivals, government holidays, or long weekends, these companies start charging heavily to customers and sell tickets at a very premium price. This is one of the easy ways in which Indian airline companies save their money.
8. Giving Discounts on Last-Minute Empty Seats:
There are times when the airline company gives discounts to the passengers at the very last moment so that their vacant seats don’t go unoccupied and they save a little amount of the cost.
Many flights used to have in-flight entertainment for the passengers. Since even that carries a little weight per seat, the total weight was larger than expected and hence forced the company to have a larger amount of fuel. On the domestic flights, many companies have now adjusted to a more no entertainment journey.
10. Reducing Labor Costs:
In the airline industry, labor accounts for almost 30% – 35% of the total operating expenses. When these airline companies see that there are less or no profits, they cut down the labor costs by laying off the laborers or by reducing their pays, or not giving them any benefits. This is a consequence of being in a business where there is cutthroat competition. In such cases, the airline companies sometimes compete on the prices and not the quality.
Final Words
These are just some of the general ways Airlines make profit. Given the dire situation where they had to be shut for months at an end it is not unlikely that there will be hike in prices for tickets and penalties as well as have previously free services now chargeable. That being said, airplanes are still a very convenient and fast way to reach a destination so it will always remain unavoidable.
Frequently Asked Questions – FAQs
Which is the No 1 airline in India?
Going by the number of passengers that use IndiGo, it is undoubtedly India’s most loved low-cost carrier. They are also the largest one in the country.
Why airlines are not profitable in India?
Most Airlines in India struggle to turn a profit due to the high taxes, price ceilings, intense competition, and variable fuel prices.
Why do airlines take longer routes to reach shorter distances?
Airlines usually do this to pick up more passengers so that they do not waste any seat on the flight.
Apple finished 2020 with a bang as it posted another massive quarter, pulling in $111.4 billion in revenue. Its revenue rose over 21% as it logged its most profitable quarter ever despite numerous restrictions created by the pandemic.
It’s the first time Apple crossed the symbolic $100 billion mark in a single quarter. The company reported $15.7 billion in services and $95billion in sales from products. To put things in perspective, Apple in the same quarter of 2019, posted revenue of $91.8 billion.
The holiday quarter is always essential for tech giants like Apple and accounts for about 30 percent of its annual product sales. The stakes were even higher this time, as the COVID- 19 outbreak delayed the production of the iPhone 12.
The pandemic even forced Apple to delay the launch date of its new product to October instead of its traditional September release. This meant that different models of the new iPhone didn’t start shipping to customers until November, cutting down the number of weeks Apple usually has to capture sales ahead of Christmas.
However, the revenue number posted by Apple beat analysts’ expectations of $103.2 billion. Many analysts had expected Apple to do well thanks to the holiday season and the debut of the iPhone 12 in October. The latest model featured a new look with 5G capabilities as well as different models of various sizes and prices.
Tim Cook noted that the results would’ve been better if not for the pandemic. The outbreak had forced Apple to close down many of its stores around the world.
Apple makes record gains as iPhone and iPad sales surge
He also pointed out the strong growth across all Apple products – not just iPhone sales to be the reason for such massive earnings. As the pandemic increased demands for home computing services and products, Apple boasted double-digit gains in all of its product categories.
To breakdown earnings across product categories, booming iPhone sales were responsible for $65.59 billion in revenue while Mac and iPad sales delivered $8.68 billion and $8.48 billion, respectively. Its burgeoning services division like Apple+ TV and Apple music jumped 24% to $15.8 billion.
“This quarter for Apple wouldn’t have been possible without the tireless and innovative work of every Apple team member worldwide,” Cook said in a statement. “We are also focused on how we can help the communities we’re a part of build back strongly and equitably, through efforts like our Racial Equity and Justice Initiative as well as our multi-year commitment to invest $350 billion throughout the United States.”
Apple’s revenue increased across all geographic areas, especially in China where its year-over-year revenue jumped by more than 56%.
To make up for the pandemic Wedbush securities analyst Dan Ives says that the new iPhone will launch a sales “super cycle”, in which consumers who have older iPhones will be able to upgrade their phones and get access to 5G connectivity with iPhone 12.
Apple also introduced another hardware product in 2020, the AirPods Max which received mostly positive reviews.
Even though there were fears of Apple’s bottom line taking an enormous hit due to the COVID lockdown, its financial performance over the last nine months has shown that Apple’s business can even withstand a global pandemic.
Sarika Anand
