Apple CEO Tim Cook attends the grand opening of the new Apple store at The Grove on November 19, 2021 in Los Angeles, California.
Mario Tama | Getty Images
Apple is on an unstoppable run at the moment, according to the chief analyst at CCS Insight Ben Wood.
The iPhone maker posted a record quarterly profit of almost $124 billion on Thursday, causing Apple’s shares to pop 11%. It beat on the top and the bottom line, with sales for every product category bar the iPad beating expectations.
“The interesting thing with Apple is it’s like a freight train at the moment,” Wood told CNBC’s “Squawk Box Europe” on Friday. “It’s weathered the pandemic extremely well.”
Apple said Thursday there are now 1.8 billion devices on the Apple network, referring to products like iPhones, iPads, Macs, Apple Watches and HomePods.
“That’s an astonishing install base, which gives them tremendous momentum,” Wood said, adding that he expects the number to climb past 2 billion toward the end of 2022.
In an interview with CNBC’s Julia Boorstin Thursday, Apple CEO Tim Cook acknowledged that inflationary pressures are affecting the company.
“We try to price our products for the value that we deliver and we are seeing inflationary pressure,” Cook said. “I think everybody’s seeing inflationary pressure. There’s no two ways about that.”
On an earnings call with analysts, Cook expanded on how inflation is affecting Apple’s business and gave an example of shipping costs.
“We’re seeing inflation and it’s factored into our gross margin and opex [operating expenses] that [Apple CFO] Luca [Maestri] reviewed with you earlier,” Cook said. “Logistics, as I’ve mentioned on a previous call, is very elevated in terms of the cost of moving things around.”
Cook said that he hoped the increased costs would be temporary. “I would hope that at least a portion of that is transitory, but the world has changed and we’ll see,” Cook said.
Like almost every other electronics business, Apple is also battling with supply chain issues. “Apple is doing better than others, but it’s not completely immune,” Wood said.
Cook said he expects supply chain problems to decrease in the March quarter but he didn’t say they’re going to disappear completely.
Neil Campling, head of TMT research at Mirabaud Equity Research, said in a statement that it’s hard to know how Apple will do in the March quarter.
“Apple don’t give us explicit guidance or trajectory of iPhones now, so it’s tough to know the set up for the March quarter, Chinese New Year, supply chain pricing dynamics etc,” he said, adding that the media is already reporting that a good first quarter bodes well for a good second quarter.
“Why? There is no qualification, lots of moving parts, cash-strapped consumers and China potentially imploding, or at least slowing, which is equivalent to imploding compared to the official line out of Beijing,” Campling added.
Correction: This story has been updated to correct the spelling of Julia Boorstin’s name in a bullet point.