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iPhones Soar, iPads Sink: Apple Earnings Down for Second Straight Quarter

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Tech Biz

iPhones Soar, iPads Sink: Apple Earnings Down for Second Straight Quarter

CEO Tim Cook promises new products this fall during quarterly earnings call.

Apple’s most recent fiscal quarter, which ended on June 29, saw the Cupertino electronics giant break its Q3 iPhone sales record. However, the iPad experienced its first decline in year-over-year sales since its release, as overall earnings for Apple fell by 22 percent in the same period.

Apple CEO Tim Cook, speaking during Tuesday’s quarterly earnings call, also assured that new products will be arriving in the fall – but that quality still reigns supreme.

“We’re here to make good products. We think that if we focus on that and do that really well, the financial metrics will come. We start at the product because we believe that the most important thing is that our customers love the products and want them,” Cook stated.

Cook continued, “We are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.”

Apple reportedly sold more than 31 million iPhones in the third quarter alone, topping last year’s figure for the same quarter by over 5 million units. The surge in iPhone sales represents a 20 percent unit sales growth compared to Q3 2012, which also enabled Apple to increase revenue by 15 percent.

In the U.S., iPhone sales rose by a remarkable 51 percent from last year, capturing 39 percent of the smartphone market share. The iPhone is also the best-selling mobile device in Japan, according to statements by Apple CFO Peter Oppenheimer during the conference call with analysts and investors.

“In Japan, IDC Japan announced that iPhone gained the number one position for all of calendar year 2012, as well as for calendar Q4 2012 in both handsets and smartphones,” Oppenheimer said. “This is also the first time a non-Japanese company has achieved the No. 1 spot for an entire year … In addition, Apple was ranked number one in Nikkei's 2013 Japan Brand [Consumer] Survey, achieving the top spot for the second year in a row, which is unprecedented for a non-Japanese company.”

While iPhone was breaking records, iPad sales were down 14 percent. Overall sales were pegged at 14.6 million units, compared to 17 million last year. Cook said that Apple was aware that the drop would happen, citing an inventory phase-out of old iPad models.

Apple posted over $35 billion in sales for Q3 2013, with a new profit just under $7 billion. This represents an overall drop of 22 percent compared to last year’s Q3 profits of nearly $9 billion. Sales are still impressive, however, considering Apple has not released a new product all year.