Apple reported another bumper quarter, boosted by strong iPhone sales and a recovery in the iPad line, ahead of the much-anticipated launch of its next flagship smartphone in the not-too-distant future.
While iPhone sales often slow in the quarter ahead of a refresh, there was little sign of a loss of momentum in the numbers for Apple’s fiscal Q3 (the three months to 1 July). iPhone revenue of $24.8 billion was up 3 per cent over the prior year, with unit sales up 2 per cent to 41 million.
CEO Tim Cook noted “especially strong demand at the high-end of our lineup”, with iPhone 7 being the most popular model and sales of iPhone 7 Plus “up dramatically” compared with iPhone 6s Plus in the same period of 2016.
The company cut its iPhone inventory to its lowest level in two-and-a-half years, indicating it is clearing the decks ahead of the anticipated iPhone 8 launch.
This time around, the usual weak spot – iPad – bucked the trend, with revenue of $5 billion up 2 per cent year-on-year, and shipments of 11.4 million units up 15 per cent. Earlier this year, Apple announced a lower-cost refresh of its core consumer iPad proposition, and the company also augmented its iPad Pro line, although the fall in average selling price indicates it is the former driving the volume.
Other highlights called out were a 50 per cent increase in Apple Watch sales – although again an absolute number was not given – and “incredible enthusiasm” for AirPod, with the company still not able to match supply and demand.
With iPad sales on the up, it fell to Apple’s Greater China unit to provide the fly in the ointment. Revenue of the region was down 10 per cent year-on-year to $8 billion. Cook said mainland China was flat year-on-year, with Hong Kong a drag.
On a group level, Apple reported a profit for the quarter of $8.8 billion, compared with $7.8 billion in the prior year, on revenue of $45.4 billion, up from $42.4 billion.
It ended the period with $261.5 billion in cash and marketable securities, an increase of $4.7 billion during the quarter – with 94 per cent of the total held outside the US.