Apple's gross margin is highest its been in 9 years

AppleInsiderAppleInsider
Posted:
in General Discussion
Apple's gross margin for Q2 2021 was 42.5%, achieved in large part through a strong iPhone sales mix.

Apple gross margin highest its been in 9 years
Apple gross margin highest its been in 9 years


The gross margin has remained at around 38% for years, but strong sales across each product line boosted the profits to a new second quarter high. A combination of several factors affected the gross margin, with popular high-end iPhones being a major contributor.

During the Q2 earnings call, CFO Luca Maestri commented on the gross margin increase and what could have affected it. Strong demand for the iPhone 12 Pro and iPhone 12 Pro Max was a contributing factor.

Apple Gross Margin
Apple Gross Margin


"So from March, we were up 270 basis points sequentially really driven by three major factors," said Maestri. "Cost savings which has been good for us during this cycle, a really strong mix on iPhone but in general across all product categories ... and foreign exchange sequentially again from December to March was favorable 90 basis points so that helped as well."

Strong sales across all product categories led to a better gross margin, and Apple expects the high margin to continue into the June quarter. The 24-inch iMac with an M1 processor goes on sale during Q3 and will also attribute to a strong gross margin.

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Comments

  • Reply 1 of 9
    mac_dogmac_dog Posts: 1,069member
    And by god, this government is doing their damndest to destroy them. So American. 
    watto_cobra
  • Reply 2 of 9
    bageljoeybageljoey Posts: 2,004member
    mac_dog said:
    And by god, this government is doing their damndest to destroy them. So American. 
    Hyperbole much?
    elijahgMacProMplsPjahbladeITGUYINSDjony0
  • Reply 3 of 9
    bala1234bala1234 Posts: 144member
    I wonder how much the new M1 chip contributed to it.
    watto_cobra
  • Reply 4 of 9
    prismaticsprismatics Posts: 164member
    bala1234 said:
    I wonder how much the new M1 chip contributed to it.
    I know, right? The Mac pricing is somewhat ridiculous considering the processor must cost less than ~50$ (There is a site where you can, if you are accurate enough and use correct numbers for N7/N7P by TSMC themselves, precisely estimate the cost: https://caly-technologies.com/die-yield-calculator/) a pop at that scale to manufacture. The other parts, including the display, are available at a very low price for the required quality compared to when they were introduced in the required specifications (pixel density etc.)

    Just to put in perspective, in the past, Mac pricing ~2012 was more realistic/had much less margin due to novel technologies but it’s the same old technology by now. No breakthrough technological change, just other looks and a cheaper to make chip.
    edited April 2021 elijahg
  • Reply 5 of 9
    entropysentropys Posts: 4,166member
    Yes the margins on the MBA and M1 MBP in particular must be among the best for a notebook in the industry.

    but if people are prepared to pay....
    FileMakerFeller
  • Reply 6 of 9
    elijahgelijahg Posts: 2,759member
    entropys said:
    Yes the margins on the MBA and M1 MBP in particular must be among the best for a notebook in the industry.

    but if people are prepared to pay....
    Apparently everyone who’s prepared to pay is already in the Mac market, otherwise Mac sales wouldn’t be flat since 2012. Cook gloats that 50% of people buying Macs are new to the platform, which considering flat sales means 50% of existing Mac users are leaving the platform too. He leaves out that not so tasty little nugget. 
    Beats
  • Reply 7 of 9
    tipootipoo Posts: 1,142member
    Considering that even paying for a large SoC is nothing like paying Intel their margin, and the prices didn't drop in turn, I do imagine that Apple Silicon juiced it quite a bit. 

    I wonder, though, if the mini LED Macbook Pros will be more expensive, or they'll use that expanded margin from AS to keep it unchanged. 
    Beats
  • Reply 8 of 9
    canukstormcanukstorm Posts: 2,700member
    elijahg said:
    entropys said:
    Yes the margins on the MBA and M1 MBP in particular must be among the best for a notebook in the industry.

    but if people are prepared to pay....
    Apparently everyone who’s prepared to pay is already in the Mac market, otherwise Mac sales wouldn’t be flat since 2012. Cook gloats that 50% of people buying Macs are new to the platform, which considering flat sales means 50% of existing Mac users are leaving the platform too. He leaves out that not so tasty little nugget. 
    Cook also mentioned that Mac sales for the last three fiscal quarters were the best ever for Mac sales.
    tmayBeatswatto_cobra
  • Reply 9 of 9
    temperortemperor Posts: 66member
    elijahg said:

    Apparently everyone who’s prepared to pay is already in the Mac market, otherwise Mac sales wouldn’t be flat since 2012. Cook gloats that 50% of people buying Macs are new to the platform, which considering flat sales means 50% of existing Mac users are leaving the platform too. He leaves out that not so tasty little nugget. 
    While that remark could have been a valid one 9 month's ago, it isn't anymore ... look at Gartner and IDC's market share numbers especially the last 3 month's more than 2% gain to the prior year is nothing short of a miracle. M1 has re-started the Mac momentum and iPhone / iPad users are starting to be interested in the Mac. 90% of tech reviews praise the M1, and it seems people read these articles and also word of mouth is fuelling the Mac moment, every M1 user I speak is super happy ... and it has translated in sales that even surpassed Apple's Q1 level, lust crazy. This is only the first inning, when the Pro models launch expect a second acceleration.
    tmaywatto_cobra
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