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

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

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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