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Apple Q3 financials positive but show iPad sales at a four year low

by Mark Tyson on 22 July 2015, 11:17

Tags: Apple (NASDAQ:AAPL)

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Last night Apple published its latest set of quarterly results. Its Q3 2015 financials broke company records, with growth evident in sales of iPhones and Mac computers. The company also cited "the successful launch of Apple Watch," as being behind the great results but didn't divvy up any numbers for the sales of its first wearable technology device.

Key figures in the quarterly results are quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion, gross margin was 39.7 per cent. Apple's international sales accounted for 64 per cent of its revenue this quarter. The products sold in the quarter ending 28th June include; 47.5 million iPhones, 10.9 million iPads and 4.8 million Mac computers. Apple also enjoyed all-time record revenues from services such as the App Store.

Apple iPhones

Apple CEO Tim Cook was very pleased with the continued success of the iPhone. "We had an amazing quarter, with iPhone revenue up 59 percent over last year," Cook told investors. In the post-results conference call Cook said that the iPhone was benefitting from greater than ever numbers of Android switchers and the much larger proportion of re-purchasers who choose to stay with iPhone smartphones. iPhone sales generated $31,368 billion in revenue during the quarter.

iPads and Macs

As ZDNet points out, the iPad looks to be in a very similar decline to that faced by the iPod range of MP3 players – but worse. While it sold over 10 million units that's a 13 per cent quarter-on-quarter decline and 19 per cent drop year-on-year. Last quarter we saw that Mac computer sales broke past iPad sales in value and this trend has been continued in the most recent quarter. Both larger iPhones and thin and light computers like the MacBook Air are chewing chunks from the iPad sales.

As you can see from the chart above Mac computer revenue grew beyond $6 billion compared to around $4.5 billion for iPads.

Other products

But what about the Apple Watch? In its figures Apple lumps this device in with sales of Apple TV, Beats Electronics, iPod and Apple-branded and third-party accessories in a category labelled 'Other Products'. This category brought in $2.6 billion during the quarter.

CEO Cook said that the Apple Watch was enjoying "a great start," but that was all we heard officially from the first full quarter during which the wearable has been available. However researchers at Canalys yesterday published estimates saying that the Apple Watch had become the world's top wearable with 4.2 million Watches sold in Q2 2015.

Looking forward the Apple CEO said that he was looking forward to the release of iOS 9, OS X El Capitan and watchOS 2 this autumn and customers signing up to Apple Music subscriptions. In Q4 Apple expects steady performance and to bring in revenue of between $49 billion and $51 billion.

HEXUS Forums :: 8 Comments

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Posted by crossy - Wed 22 Jul 2015 15:43
Cook said that the iPhone was benefiting from greater than ever numbers of Android switchers
I'm not wholly convinced - yes I've heard of people being hacked off and switching back to iPhone, but I've heard almost as many going the other way. And of course Samsung's mishandling of the S6/Edge must have helped them (Apple) out.
Both larger iPhones and thin and light computers like the MacBook Air are chewing chunks from the iPad sales.
Nope, not my experience. It's actually better Android and Windows-based tablets that are stealing the iPad sales. Surface especially is a pretty compelling proposition.

Loathe or love them, you've got to admire Apple's success.
Posted by LSG501 - Wed 22 Jul 2015 18:39
Crossy, you'll see in 90% of apple events these days they're comparing themselves to Android, selectively picking statistics which make them appear better than Android yet the simple fact is that Android is the dominant platform in the mobile market. It's not the most profitable, that is apple because for some reason they're ‘fashionable’ to own.

Also like you I'm not convinced about the switching back to iPhone, I'd argue most of the increase is from opening up to China although the wording ‘greater than ever numbers’ could mean 2 versus 1 the year before lol. Also a large percentage of apple sales usually go to ‘repeat purchases’ who are replacing the artificially nerfed 2 year old iPhone or getting a new one while handing the old one down to their children.

I'd say people aren't buying iPads because of 2 reasons, the one they already have is fine for consuming things or people are finally realising that to get work done you're better off with a pc/laptop. Maybe people are getting ‘weaned off’ apples biggest strength, their marketing and the blogs incessant fanboyism towards Apple products even when there are better products out there.

I'm in the market for some new equipment, I'm already using android and if I don't get another android phone I'm switching to windows phone purely because of the way it will integrate with my ‘lifestyle’, fixing android to work with MS is getting annoying and it's not down to MS (who are doing everything they can to work everywhere, partially out of need, partially out of common sense I'd like to think), it's down to google stopping the office contacts sync tools for consumers and only giving it to google doc users… yeah that's really going to make me sign up, I've already got office so don't need docs plus it's cheaper to grab a windows phone lol. I'm also after a new tablet, the nexus 7 I've got is too small (still use it occasionally) and so again I'm looking at windows based item, namely the surface pro 4 when it comes out, it's the best for my needs (I want a stylus). Now you might have noticed something in that little paragraph… there's a complete lack of apple hardware being mentioned and I work in the design field, a market that is supposed to be apple's home turf…. the simple reason is this, I don't want a fashion item, I want a best tool for the job.
Posted by crossy - Wed 22 Jul 2015 19:15
LSG501
I'd say people aren't buying iPads because of 2 reasons, the one they already have is fine for consuming things or people are finally realising that to get work done you're better off with a pc/laptop. Maybe people are getting ‘weaned off’ apples biggest strength, their marketing and the blogs incessant fanboyism towards Apple products even when there are better products out there.

I'm in the market for some new equipment, I'm already using android and if I don't get another android phone I'm switching to windows phone purely because of the way it will integrate with my ‘lifestyle’, Now you might have noticed something in that little paragraph… there's a complete lack of apple hardware being mentioned and I work in the design field, a market that is supposed to be apple's home turf…. the simple reason is this, I don't want a fashion item, I want a best tool for the job.
Pretty well reasoned arguments. But I'm going to disagree with the perception that tablets are for “content consumption” only. A decent tablet - like the Surface or the Transformers - can certainly exceed the utility of a Chromebook (or the Windows equivalent).

I just bought a Lenovo Yoga2 - mainly because Samsung's attitude to bloatware turns me off - and I'm thinking that the pairing of this with a fire-sale HP Touchpad Bluetooth keyboard will help greatly - especially as Microsoft were kind enough to do decent Excel and Word for free (guys @microsoft, I'd happily pay for these apps). I just wished there was a replacement for the Note10.1 - preferably one with deinstallable bloatware.

Last bit is interesting - as you rightly say the “creatives” like yourself have always been iPad's captive market. Hey, maybe we'll finally see some decent guitar apps for Android … but I'm not holding my breath. But, according to PC World there's only £30 difference between a Surface 3 and an iPad - and I'll argue until I'm blue in the face that the Surface 3 is capable in more areas.
Posted by LSG501 - Wed 22 Jul 2015 22:02
crossy
Pretty well reasoned arguments. But I'm going to disagree with the perception that tablets are for “content consumption” only. A decent tablet - like the Surface or the Transformers - can certainly exceed the utility of a Chromebook (or the Windows equivalent).
You could argue a surface is closer to a laptop (I know I class it more as a full pc) than a slate like the iPad, same goes for the transformers, both were designed with a keyboard in mind from day one, clearly it was the right idea because just look at the number of aftermarket keyboards there are for the iPad lol. I'd disagree over the os side of things on the transformer but pretty much everything is better than a chromebook in my view lol

Last bit is interesting - as you rightly say the “creatives” like yourself have always been iPad's captive market. Hey, maybe we'll finally see some decent guitar apps for Android … but I'm not holding my breath. But, according to PC World there's only £30 difference between a Surface 3 and an iPad - and I'll argue until I'm blue in the face that the Surface 3 is capable in more areas.
I'd join in with that argument, I'd back you up whole heartedly with the view that the surface models are much better options than an iPad or android tablet. :)
Posted by b0redom - Thu 23 Jul 2015 09:59
I suspect that lack of sales in iPads is as much a function of there not being a real drive to upgrade. I bought a Mini 2 just before heading out to Australia as the battery life was better than my iPhone 6. There was no real point in considering a mini 3 because as far as I could tell the only thing added was a fingerprint scanner (which I wouldn't use).

In a similar way to PCs, there's very few compelling reasons to upgrade constantly anymore beyond epeen. My late 2013 iMac (the one with the 680GTX) is able to play most games at native res (or very close) with most of the eye candy on, so until it can't I won't be upgrading.

It's also possible that iPhones are canibalising some of the sales in iPads as the screens, sizes and CPU etc are ‘good enough’, for most of what I'd previously use my iPad for.

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