iPhone helps Apple ring in $7.7 billion profit

International demand for the iPhone led to another strong quarter for Apple. The company posted $37.4 billion in revenue and a net profit of $7.7 billion for its third quarter ending on June 28. The results both were increases from the same quarter last year when the company posted $35.3 billion in revenue and a net profit of $6.9 billion.
In a conference call with investors, top executives at the Cupertino, Calif.-based, company attributed the growth to the sales of iPhones, Mac computers and Apple’s services such as iTunes. International sales accounted for 59% of the quarter’s revenue.
This time of year is often slow compared with the fall that has both back-to-school and holiday shopping seasons — not to mention the possibility of shiny, new smartphones being released such as the iPhone 6 (rumored to come with a new sapphire crystal screen). Yet, Apple sold 35.2 million of its current iPhone models, an increase of four million over the previous year, representing a 13% growth rate.
“iPhone sales were at the high end of our expectations, despite new product rumors that we believe resulted in purchase delay,” said Luca Maestri, Apple SVP and CFO.
Apple’s CEO Tim Cook was especially pleased with the progress in Brazil, Russia, India and China where iPhone sales were up 55% year-over-year. In China, where Apple launched the iPhone on China Mobile in January, iPhone sales really took off.
“China, honestly was surprising to us,” Cook said. “We thought it would be strong, but it went well past what we thought. We came in at 26% of revenue growth, including retail and if you look at the units, the unit growth was really off the charts across the board.”
Apple’s main smartphone rival, Samsung, is struggling in China and worldwide amid pressure from both high-end and low-end competition. On July 8, the South Korean device maker warned that its operating revenues fell about 24% for the quarter ending in June.
In other areas, Apple’s Q3 Mac computer sales grew from 3.8 million units last year to 4.4 million units this year.
The one low point for Apple were iPad sales, which slumped significantly, down 9% at 13.3 million units for the quarter.
“iPad sales met our expectations, but we realized they didn’t meet many of yours,” Cook said. He blamed the decline on “market softness in certain parts of the world.” As an example, Cook cited the IDC’s latest estimate that indicated a 5% overall decline in the U.S. tablet market.
However, the Apple CEO remained “bullish” on the tablet’s future.
“We’re confident that we can continue to bring significant innovation to this category through hardware, software and services,” he said.