iPhones shine, iPads lag... again

Samsung may have warned of a 60 percent shortfall in operating profit for its current quarter, but archrival Apple is still trucking along with healthy profits. The company reported revenue of $42.1 billion (up 12 percent year-over-year), which beat its own forecast of $37 to $40 billion for fiscal Q4 (which ended on September 27). Profit for the quarter came in at a heady $8.5 billion.
Gross margins for the quarter came in at 38 percent (up from 37 percent for the same period last year), earnings came in at $1.42 per diluted share, and international sales accounted for 60 percent of Apple’s quarterly revenue.
The big star for the quarter was no doubt the iPhone 6 and iPhone 6 Plus. The late September launch of the new iPhone (which broke the 10 million mark during the opening weekend of sales) added greatly to Apple’s bottom line. The huge uptick in iPhone 6/iPhone 6 Plus adoption in late September helped Apple sell a record 39.2 million iPhones for the quarter (a 16 percent increase YoY from 33.8 million units).
IDC reported earlier this month that Apple made its way into the Top 5 list of global PC manufacturers, with five percent of the market, thanks to strong Mac sales. Apple’s earnings report confirmed the resurgence of the Mac, having recorded the sale of 5.5 million units during the quarter (a 21 percent increase YoY).
However, Apple’s iPad lineup continues to lag, posting both sequential and YoY declines. Apple reports that it sold 12.3 million iPads during fiscal Q4, which was down seven percent from the previous quarter and 13 percent YoY.
It remains to be seen whether the new iPad Air 2 and iPad mini 3 (the iPad mini 3 got nothing more than Touch ID and a new Gold color option compared to its predecessor) can help to reverse the sales and revenue slide for the iPad. The two newcomers will have help from a discounted lineup of older models including the iPad Air, iPad Mini 2, and iPad mini, which have gotten price cuts ranging from $50 to $100 across the board.

Apple expands the iPad family and cuts prices on previous gen models 

“Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,” said Apple CEO Tim Cook. “With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.”
For fiscal Q1 2015, Apple is forecasting revenue of $63.5 to $66.5 billion and gross margins of 37.5 to 38.5 percent.

Sources: Apple [1], [2] (PDF)

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg

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