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Technology

Apple reports record quarter as China sales jump 58%

Tech giant warns ongoing supply constraints to hit iPhone and iPad

Sales of the iPhone jumped nearly 50% year over year in the June quarter, propelled by strong demand for Apple's first 5G-capable smartphone. (Photo courtesy of Apple) 

PALO ALTO, U.S. -- Apple reported its highest-ever June quarter revenue on Tuesday, driven by robust sales of its first 5G iPhones, especially in China. The U.S. tech giant warned, however, that ongoing supply constraints are expected to worsen in the September quarter, particularly for the iPhone and iPad.

For the three months ended June 26, Apple's total revenue grew 36.4% on the year to reach $81.4 billion. Greater China, which includes mainland China, Hong Kong and Taiwan, reported the highest revenue growth of all regions, with a 58.2% year-over-year jump to $14.8 billion in the quarter, up from the $9.3 billion last year.

"We had a particularly strong response to the 12 Pro and the 12 Pro Max [in China]," Apple CEO Tim Cook said during an earnings call on Tuesday.

"We also set June quarter records for wearables, home, and accessories, for Mac, and for services, so it was sort of an across-the-board strength, and we're seeing plenty of new customers come to the market [in China]," Cook added.

Asked whether Beijing's recent moves to tighten regulations on Chinese big tech would affect Apple's growth in the country, Cook said that "in terms of the regulatory focus, what we are focusing on from our angle, is to serve users there and try to make sure that they're very satisfied with the products and the services that we're showing."

Elsewhere, Apple registered a 30.2% year-over-year revenue growth in Japan to $6.5 billion. The rest of Asia Pacific reached $5.4 billion, a 28.5% increase compared with last year.

Apple's record June earnings came mainly from the nearly 50% year-over-year increase in iPhone sales to $39.57 billion. However, the company also saw double-digit percentage growth in all its other product categories, including Macs, iPads, wearables and services, a trend driven by the widespread adoption of working from home and remote learning.

Apple said the strong year-over-year growth in all sectors and regions was partly due to the COVID-19 lockdown that took effect during the June quarter last year, which hit the company's revenue hard at the time.

Meanwhile, the ongoing supply constraints, caused by both COVID-19 disruptions and global chip shortages, will continue into the September quarter, Apple warned.

In the previous earnings call, the company estimated a revenue impact of $3 billion to $4 billion in the June quarter. However, Apple said it was able to mitigate some of those constraints in the past three months.

"We expect supply constraints during the September quarter to be greater than what we experienced during the June quarter. The constraints will primarily impact iPhone and iPad," Apple CFO Luca Maestri said during the earnings call Tuesday.

"The majority of constraints we're seeing ... are that I would classify as industry shortage," Cook added.

Apple's share price dipped nearly 2% during after-hours trading Tuesday.

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