Apple said that they will expand point of sale for its watch
with JB Hi Fi, Harvey Norman and Dick Smith tipped to be selling the Apple
Watch by Xmas.
Apple sold 47.5 million iPhones, a 35 percent gain, in the
period that ended in June, the company said in a statement early this morning.
Analysts had anticipated 48.8 million shipments. The company
forecast revenue of US$49 billion to US$51 billion in its fiscal fourth
quarter, which ends in September, short of the average estimate for US$51.1
billion, according to data compiled by Bloomberg.
Bloomberg said that any indication of slowing demand for
iPhones could spark concern that Apple is going to have a hard time selling
more smartphones in the final months of the year, after the September debut of
the latest version fuelled record profits. A new model is expected to be
released later this year.
"It's going to be running up against really hard
comparisons," said Abhey Lamba, an analyst at Mizuho Securities in New York "A
lot of people jumped to the larger-screened iPhones, now that we've gotten to
the point where the innovation in the next release is not going to be as
massive as we had last year."
Apple shares fell as much as 8.8 percent in extended
trading. The stock declined 1 percent to US$130.75 at the close in New York,
leaving it up 18 percent this year.
Revenue in the fiscal third quarter, which ended in June,
was US$10.7 billion, or $1.85 a share, while revenue rose 33 percent to $49.6
billion, the Cupertino, California-based company said. Analysts on average had
forecast third-quarter profit of $1.81 a share on sales of $49.4 billion. The
gross margin was 39.7 percent, topping the company's outlook for 38.5 percent
to 39.5 percent.
Total revenue from greater China more than doubled to $13.2
billion, even as the Chinese economy weakened.
Apple didn't release unit sales of the Apple Watch, which
was introduced in April.
It included the
results for the smartwatch in a broad category called "Other," along with items
such as Beats headphones and iPod sales.
Revenue in the category rose 49 percent to $2.64 billion,
the company said. Analysts predicted on average 3.4 million sales of the Watch
with an average selling price of $499, according to the Bloomberg survey.
"We looked back at similar periods for iPhone and iPad when
they were originally launched, and we've actually sold more Apple Watches than
we sold iPhone and iPad at the time," Luca Maestri, Apple's chief financial
officer, said in an interview. "We feel very good about the start and what we
feel particularly happy about is, frankly, the customer response, the feedback
IPad sales continued to suffer, with tablet shipments
falling 18 percent to 10.9 million, marking the sixth straight quarter of
declines and matching analysts' average estimate. Apple is working on a new
larger-screened version of the iPad that could appeal to corporate customers
looking to use the device as a replacement for a laptop computer, people
familiar with the plans have said.
Mac shipments climbed 8.7 percent to 4.8 million, matching
Cook called the iPhone 6 a runaway success, and that the
product category is continuing to gain significant market share. On the call,
he said that the phone's growth was triple the rate of the smartphone market
"We had an amazing quarter, with iPhone revenue up 59
percent over last year, strong sales of Mac, all-time record revenue from
services, driven by the App Store, and a great start for Apple Watch,"
Cook said in the earnings release.
On the Apple Watch, Cook said that the newest product has
exceeded expectations, and that the company will expand point of sale for its
watch with JB Hi Fi, Harvey Norman and Dick Smith tipped to be selling the
Apple Watch by Xmas.
Other product revenues were $2.6 billion on the
quarter-compared to $1.7 billion the prior quarter. Analysts were expecting
$1.8 billion of watch sales alone (which are included in that "other"
Apple's cash pile broke above $200 billion for the first
time ever, hitting $203 billion. That is up 5 percent from the prior quarter,
and up 23 percent from last year.