iPhone sales climb steadily, iPad sinks, but Apple still rakes in $7.7 billion in Q3 profit


iPad mini retina display. Photo: Jim Merithew/Cult of Mac
iPad mini retina display. Photo: Jim Merithew/Cult of Mac

Apple fell just shy of Wall Street’s third-quarter revenue predictions but came in well within its own guidance, bringing in $37.4 billion gross and $7.7 billion in profit for Q3 2014.

iPhone sales were modest at best, but that’s probably because everyone is waiting for the iPhone 6 in September.

Apple sold 35 million iPhones, 13.2 million iPads and 4.4 million Macs in the just-ended quarter, the company announced Tuesday just prior to its Q3 earning call. That’s decent for what’s traditionally the company’s slowest quarter of the year, but they’re not numbers to sing about—which is why Apple is steering everyone’s attention to what it has planned for the coming months.

“We are incredibly excited about the upcoming releases of iOS 8 and OS X Yosemite, as well as other new products and services that we can’t wait to introduce,” said Apple CEO Tim Cook in a press release announcing the result. Apple expects to make between $37 billion and $40 billion in revenue next quarter, which seems a little low but also gives Cupertino wiggle room to surpass its own expectations and blow away investors.

Most analysts expected Apple to report $38.4 billion in revenue for Q3, and Apple’s own projection for the quarter was $36 billion to $38 billion.

iPhones and iPads

iPhone sales were expected to remain strong despite Q3 being a historically slow quarter for Apple, and Apple fell well short of the more bullish projections of around 40 million units.

iPad sales really aren’t doing well in terms of growth: Apple sold 13.2 million last quarter, down from 16.3 million in Q2 and 14.6 million this time last year.

“Given the trough in the cycle, the quarter was solid”

In terms of Apple’s numbers announced today, top Apple analyst Horace Dediu told Cult of Mac that he was disappointed with iPad sales, and that Cook believes there is something “hindering penetration.”

“iPhone is doing well and the 5c is an increasing part of the mix,” added Dediu. “Eyes are on the next product launch cycle, and given the trough in the cycle, the quarter was solid.”

Wall Street has changed its attitude toward AAPL since a surprising number of iPhones were sold last quarter, and the stock has continued to climb steadily since then. Cook and Co. have assured us that the best is yet to come this fall, and the iPhone 6, new iPads, updated Macs and the mythical iWatch are all expected to be unveiled soon.

Apple’s earnings call with analysts and investors is getting ready to start, so be sure to follow along on Cult of Mac’s liveblog.

Source: Apple