Apple achieved another record-breaking quarter this spring, earning $10.7 billion on revenue of $49.6 billion. CEO Tim Cook said that the company surpassed its sales expectations for the iPhone, iPad, Mac products, and yes, even the Apple Watch. Here are four key takeaways from the report.
1. Users love bigger phones
The iPhone was, of course, Apple’s star performer with a record 47.5 million sold during Apple’s fiscal third quarter. Unit sales were up 35% year-on-year, almost three times the growth rate for the overall smartphone market, according to Cook. Apple’s iPhone revenue rose 59%, implying that the iPhone 6 and 6 Plus represented the vast majority of sales.
Bigger phones typically mean more data usage, as users take advantage of larger screens to stream video and use their smartphones for activities that were once reserved for tablets or computers. Speaking of tablets …
2. iPad sales are in decline
At the lowest level since 2011, iPad sales fell 13% vs. last quarter, coming in at 10.9 million.
For the past several years, iPad sales have skyrocketed during the holiday selling season, leveling off during the rest of the year. But those levels seem to slip a little lower each year.
Wireless carriers have relied on tablets to encourage users to switch to service plans that offer “buckets” of data for several devices to share. During the most recent quarter, Verizon Wireless said that most of its net new connections came from tablet sales.
3. Android users are switching
“We experienced the highest switcher rate from Android that we’ve ever measured,” said Cook. The move from Android to Apple does not appear to be a two-way street. “Among iPhone users planning to purchase a new phone, 86% plan to purchase another iPhone,” said Cook. “That compares to 50% repurchase intent for the next-highest brand measured.”
With the launch of iOS 9, Apple will be launching an Android app called Move to iOS. Apple said the new app will enable users to wirelessly switch from an Android device to a new iOS device, securely transferring contacts, message history, camera photos and videos. Apple said Move to iOS will also help users rebuild their app libraries.
4. The watch needs some time
Speculation about sales of the Apple Watch have been all over the map as analysts try to read into Apple’s disclosure that it sold $2.6 billion worth of products that were not iPhones, iPads or Macs. That amount is almost $1 billion higher than it was last quarter, so clearly the watch had an impact but there are no hard numbers.
What Apple has revealed about the watch is this: CFO Luca Maestri told The New York Times that during its first nine weeks on the market, the Apple Watch had higher sales numbers than either the iPhone or the iPad had during their first nine weeks. That’s despite the watch’s well-publicized supply shortages. Does it mean the Apple Watch is set to redefine the timepiece market the way the iPhone changed the cell phone segment? Time will tell.
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