Light Reading

Apple Earnings: Strong iPhone Sales, iPad Sales Slump, $7.8B Profit

Mitch Wagner
7/22/2014
0%
100%

iPhone sales drove a strong third quarter for Apple, but iPad sales cast a shadow, with sales down year-over-year for another consecutive quarter, the company reported Tuesday.

Quarterly revenue was $37.4 billion and profit $7.8 billion or $1.28 per diluted share. That compares with $35.4 billion and net profit $6.9 billion or $1.07 per diluted share in the year-ago quarter. The gross margin was 39.4%, up from 36.9%, Apple Inc. (Nasdaq: AAPL) said.

The record June quarterly revenue was driven by strong sales in the iPhone and Mac and growing revenue from the Apple ecosystem, driving highest EPS growth rate in seven quarters, Apple CEO Tim Cook said in a statement.

But despite the record EPS, Apple did not meet analyst estimates of $38.31 billion for the quarter.

Apple traded at $94.18 at about 7:30 p.m. EDT, down $0.52 in after-hours trading.

For its fiscal fourth quarter, Apple expects revenue between $37 billion and $40 billion, and gross margin 37-38%.

Apple sold over 35 million iPhones, for a new third-quarter record, with "healthy growth" in entry level, mid-tier and lead iPhone categories, Cook said in a conference call with analysts after market close on Tuesday. iPhone sales were up a "very strong" 55% year-over-year in the BRIC countries.

Mac sales saw strong growth, 18% year-over-year in a market that shrunk by 2% according to IDC, Cook said.

The App Store and other Apple ecosystem services were strong performers as well. For the first nine months of the fiscal year, the iTunes software and services line items were the fastest-growing part of Apple's business, Cook said. iTunes billings grew 20% year-over-year in the June quarter, and reached an all-time quarterly high driven by App Store results.


Want to know more about mobile? Check out our dedicated mobile content channel here on Light Reading.


The 35.2 million iPhones sold in the third quarter was an increase of 4 million year-over-year, for 13% growth, Apple CFO Luca Maestri said. iPhones account for 41.9% of the smartphone subscriber base, according to ComScore, Maestri said.

Maestri bragged about iPhone business usage: Medtronic has developed 175 internal iOS apps for more than 16,500 iPhones used by employees to facilitate sales, improve productivity, and keep marketing materials up-to-date. Nestlé uses more than 25,000 iPhones, and NASA uses more than 26,000.

iPhone 5C sales were strong compared with last year's mid-tier model, the 4S, growing the highest year-over-year for any third quarter for mid-tier iPhones, Cook said.

But iPad sales were bad news. Apple sold 13.3 million iPads, compared with 14.6 million in the June 2013 quarter. "iPad sales grew overall in developing markets, with particularly strong year-over-year growth in the Middle East, where iPad sales were up 64%, in China, where they grew 51%, and in India, where they were up 45%," Maestri said. "This growth was more than offset by lower growth in more mature markets."

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

(16)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
7/31/2014 | 2:45:53 PM
Re: iPAD, less frequently
Kruz - A company with a 10-point lead over its nearest competitor is by definition by far the market leader. 

Which is not to say that position is secure. 

The tablet story is an intersting one. It's possible the whole thing was a bubble. That doesn't make sense to me -- the tablet seems to me to be a terrific device. But perhaps I'm just in a minority on that.
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
7/25/2014 | 8:38:01 AM
Re: iPAD, less frequently
Mitch, I still think it would be fun to play second base for the Yankees, but wishing it will happen will not make it so.  I do think Apple wants to be a player in any market and Apple probably wanted that in the days it wasn't, also (contrary to what the company said).

I think the tablet story is far from told, mostly because it hasn't even been 5 years since the first iPad.  We know tablets have revolutionized so many things but the question is, I guess, is the tablet a commodity already?  Will it soon be akin to the caculator and someday you'll pull a tablet off the endcap before checking out of Walmart?

Then, where does that leave Apple?  I really think storage is the key strategic lever for the mobile device industry.  Back-up storage is a huge barrier to exit from one provider to another, yet Apple is pricing it ridiculously high.  If they are making any misstep right now, I think it's in this area and that iCloud should be free or at least priced in a way that it is free, unlimited, for a year each time you buy a device.  I have three "i" devices bought within a year, yet only 25g of free storage, the same as if I'd only bought one.

Wearables will be more of a thing if they are the same technology as the user's phone and tablet, and I really think storage will be the glue there.
futurephil
50%
50%
futurephil,
User Rank: Light Sabre
7/23/2014 | 3:08:55 PM
Re: explain, please
:)

Meanwhile, we're crushing today's comment quota. I mean, just crushing it.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
7/23/2014 | 2:55:44 PM
Re: explain, please
First off, Phil, you should remember that most journalists can't afford to own stocks. That aside, collectively we've fallen into the trap of feeling compelled to over-analyze every number that gets spit out at us. And thanks to people like Malcolm Gladwell, we now all want to prove that we can examine data points out of context to find a greater truth. Add in the fact that even "expert" analysis tends to be lazy and self-serving, and it's pretty easy to see why quantitative "analysis" is so lacking. Good thing the analytics machines will straighten us out.
futurephil
50%
50%
futurephil,
User Rank: Light Sabre
7/23/2014 | 2:35:11 PM
Re: explain, please
Fair point. I sometimes still dodge your questions purely out of habit.

Anyway, to clarify, if you're still selling 6,200+ devices an hour a mere four years after inventing a product category -- and your stock is up 300 percent in five years (3% today) -- sorry, that's bad news. Wall Street said so.

I wish reporters could own stocks.

-ph 
Kruz
50%
50%
Kruz,
User Rank: Light Sabre
7/23/2014 | 2:17:17 PM
Re: iPAD, less frequently
Apple is not "by far" the market leader when it comes to pads. It had a 40.2% market share last year but is at 32.5% this year. Samsung grew from 17.5 to 22.3%, an increase it grabbed directly from iPad's share. iPad consumers are looking for a decent offering at a cheaper price, and this is where Samsung is doing best.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
7/23/2014 | 2:00:46 PM
Re: explain, please
 

Phil,

 

Stop asking reporters for thoughtful commentary.  I have yet to get a straight answer from an LR editor (current or former!).

:)

seven

 
futurephil
50%
50%
futurephil,
User Rank: Light Sabre
7/23/2014 | 1:38:10 PM
Re: explain, please
I wanted to see if you were using your own judgement or acting like CNBC.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
7/23/2014 | 1:23:47 PM
Re: iPAD, less frequently
Kruz - "Other players (namely Samy) are aggressively enhancing their tablet giving it a competitive price tag."

Apple is by far the market share leader. It's selling far more tablets than its competitors. Following competitor strategy does not seem to be the way for Apple to go here. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
7/23/2014 | 1:22:13 PM
Re: Google Employee use of Iphone
chuckj - Google is aggressive about developing its apps onto iPhones. I wouldn't be surprised to see iPhones in a good number of Googlers' hands. 
Page 1 / 2   >   >>
Flash Poll
From The Founder
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
Between the CEOs
Affirmed Networks CEO: Digging Into NFV

5|28|15   |   40:26   |   (2) comments


Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
Charter Seals Deals for TWC, Bright House
Mari Silbey, Senior Editor, Cable/Video, 5/26/2015
Eurobites: Alcatel-Lucent Trials 400G in Czech Republic
Paul Rainford, Assistant Editor, Europe, 5/26/2015
Will Carriers Follow Facebook's Networking Lead?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/28/2015
Charter Plans Business Services, Wireless Push
Alan Breznick, Cable/Video Practice Leader, 5/27/2015
Facebook Reinvents Data Center Networking
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/26/2015
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
On May 29th 1 PM ET, Steve Saunders, founder and CEO of Light Reading, will be drilling into the "pains and gains" of NFV with Saar Gillai, SVP & GM for NFV at Hewlett-Packard Co. (NYSE: HPQ) (HP). He has defined a four-step NFV model describing a sequence of technology innovation. It's a must-read doc for any network architect looking to get to grips with their NFV migration strategy. Join us for the interview, and the chance to ask Saar your NFV questions directly!
Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
Cats with Phones