Apple sees strong iPhone sales; deems Watch launch a “great start” – Mobile World Live

Apple sees strong iPhone sales; deems Watch launch a “great start”

22 JUL 2015
Tim Cook

Tim Cook, CEO of Apple, said the company had seen an “amazing quarter”, with strong sales growth for its iPhone line – but all eyes were on the “great start” for Apple Watch.

Unsurprisingly, the company did not give much in the way of colour for Apple Watch. Cook said that demand exceeded supply “by a wide margin”, leading to a delayed launch through Apple’s retail channels. But toward the end of the quarter, availability expanded into six additional countries and, “in the past few days, we’ve been able to catch up with demand”, enabling availability in 19 countries and with three more to be added imminently.

It is possible to glean some Apple Watch data from the financials. While the “other products” group it sits in saw 56 per cent sequential growth to $2.64 billion (up $952 million) in the three months (Apple’s fiscal Q3), this division also hosts Apple’s Beats Electronics unit and (refreshed) iPod line among others.

But in the company’s conference call, Luca Maestri, CFO of Apple, said that Apple Watch is responsible for “well over 100 per cent of the growth”, offsetting a decline in iPod and accessory sales. This means that Apple Watch is likely to be the first $1 billion per quarter wearable.

It is also very difficult to ascertain Apple Watch shipment volumes, due to the wide range of price points across various versions of the device.

iPhone
In its established business, iPhone sales increased 59 per cent year-on-year to $31.37 billion, with unit shipments up 35 per cent to 47.53 million. The device did see a sequential decrease, which is not uncommon as the smartphone loses some freshness and anticipation for the next model builds.

Cook said that the strong iPhone results were “broad-based in both developed and emerging markets”, with the highest switch-rate from Android that it has ever measured. The “strong mix” of iPhone 6 and iPhone 6 Plus led to a $99 increase in average selling price to $660, despite foreign exchange impact.

iPad
For iPad, sales declined 23 per cent year-on-year to $4.54 billion, with unit shipments down 18 per cent to 10.93 million. Maestri said that sell-through to customers was actually a little higher, at 11.2 million units, as the company reduced channel inventory.

With question marks over the future growth potential of the iPad line, the CFO said that the company is “very excited about the advances in iPad experience coming in iOS 9”, including enhanced multitasking, picture-in-picture for FaceTime and video, and enhanced QuickType to improve text input.

Cook was also optimistic, stating that “the enterprise business is picking up”, and that “the iPad consumer upgrade cycle will eventually occur, because as we look at the usage statistics on iPad, it remains unbelievably great”. He also noted potential in emerging markets as well as developed – “I look around, I see opportunity left and right, and that’s what we’re focused on”, he said.

On a group level, the company posted a net profit for the quarter to 27 June 2015 of $10.68 billion, up 37.8 per cent year-on-year, on revenue of $49.61 billion, up 32.5 per cent.

Its results for Greater China were described as “especially impressive”, with revenue more than doubling year-on-year to more than $13 billion.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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