Apple’s Q3 results – 6 things you need to know

22 Jul 2015

Apple sold 47.5m iPhone devices in the third quarter, a 35pc increase, but not as many as Wall Street analysts would have liked.

How many Apple Watches did Apple sell in Q3? How much of a cash pile is Apple sitting on? And is the iPhone floundering? These questions and more are answered here.

Apple last night reported the almost perfect quarter. CEO Tim Cook was even moved to describe it as “amazing”. However, Wall Street didn’t share the same spirit and shares in Apple slid 8.8pc overnight, wiping US$66bn off Apple’s share value.

All eyes were on sales of the Apple Watch, Apple’s newest form factor. While Ap ple was circumspect about sales of the device, sales in the “other” category that Apple Watch was filed under alongside projects like the iPod and Apple TV were boosted to the tune of US$1bn.

Here are the key numbers to emerge from Apple’s bumper third quarter:

1. US$66bn — the amount written off Apple’s share value in overnight trading

Shares fell 8.8pc as the company failed to meet the high expectations off Wall Street.

Despite reporting a perfect near US$50bn quarter, shares in Apple fell 8.8pc overnight as sales of Apple’s prized iPhone missed analyst expectations. Analysts had been tipping sales of US$51.1bn.

2. US$1bn – the amount Apple may have made from the Apple Watch so far

While filed under the “other” category along with Apple Music, Apple iPods and the Apple TV, Apple said that sales of the Apple Watch were 100pc of the growth rate of the other products filed under “other”. Analysts reckon that more than 3m of the Apple Watch devices were sold during the quarter, but Apple is being typically coy. Sales of devices under “other” were US$2.64bn, up about a billion dollars from US$1.7bn in the previous quarter. But only Apple really knows if the Apple Watch was a factor.

3. Apple sold 47.5m iPhones in the quarter

Apple sold 47.5m iPhone devices in the third quarter, a 35pc increase. However, this was sniffed at by analysts who had anticipated sales of 48.8m devices. In an earnings call, CEO Tim Cook said Apple had 600,000 fewer iPhones in channel inventory because Apple tries to avoid holding unnecessary inventory. However, even if Apple had sold more than 600,000 extra iPhones it still may not have met analyst expectations.

4. Revenue from China more than doubles

Total revenue from China for Apple doubled in the third quarter to US$13.2bn, despite the weakening condition of the Chinese economy. Sales in China were up 87pc to be exact, according to CFO Luca Maestri.

5. Slump continues in terms of iPad units

Apple sold 10.9m iPad devices, this was down 18pc on last year. While this indicates tablet computers are still struggling in the market, Apple has no plans to relinquish its focus on the iPad and even bigger 12-inch models are still being rumoured for the business/enterprise market.

6. Apple has US$203bn in cash

Yes, Apple is sitting on a hoard of cash totalling US$203bn. If it wanted to it could probably bail out countries around the world from crippling debt or go crazy on corporate perks. But that’s not the Apple way. Apple has the war chest to explore new areas if it so wishes, such as an eventual TV set or the famed Apple Car we hear so much about these days. Big bets by the company currently include renewable energy using wind and solar to power its data centres and corporate offices. It’s safe to assume Apple is not going to Vegas with any this cash hoard anytime soon.

iPhone 6 image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years