Apple (AAPL) generated $109.4 billion in revenue for the fiscal third quarter ended June 27, a figure that exceeds the $108.2 billion the company booked for all of fiscal 2011. Tim Cook, who retired from the CEO role to become executive chair, conducted his final earnings call on July 30 to discuss these results, marking a significant shift in the company's leadership to John Ternus.
The quarterly revenue represents a 16% year-over-year increase, driven largely by the iPhone. Sales of the device, which account for approximately half of the company's total revenue, grew 22% to reach $54.3 billion. In contrast, the services segment, comprising advertising, support, the App Store, and payment services, grew 12% and now constitutes 28% of total sales.
A comparison with the fiscal year 2011, the first full year under Cook's leadership, highlights the scale of this growth. In fiscal 2011, Apple's total sales were $108.2 billion, with the iPhone contributing $47.1 billion, or 43% of the total. Today, the iPhone's share of the top line has expanded, meaning Ternus will likely rely on it for near-term sales growth. The company recently launched the iPhone Duo, a foldable phone priced at $2,000, and investors will assess its initial success during the fourth-quarter earnings report.
Long-term strategy presents a more complex challenge. While no company can rely on a single product indefinitely, Apple's recent track record in new hardware has been mixed. The company attempted to commercialize a self-driving car but failed to do so successfully, and its VisionPro product has seen limited adoption. Ternus has reportedly prioritized product design and aims to make the organization leaner by releasing products throughout the year rather than relying on special events.
The market currently prices Apple as a growth stock. The company's shares trade at a price-to-earnings ratio of 38, which is higher than its own 10-year median of 27 and also exceeds the S&P 500's P/E multiple of 27. Over the past 15 years, Apple stock has returned 2,720% including dividends, outperforming the S&P 500 index's return of 758.8%. Despite this historical performance, the current valuation suggests that new products must scale quickly to justify the premium placed on the shares.