It seems as though Apple is having a typical "s" year. When the company launches an iPhone with an s at the end of the title there is usually a levelling out of sales, which in turn usually leads to plenty of doom mongering that Apple has topped out. It is happening again as Apple released its third quarter financials that showed that iPhone sales fell below analyst expectations.
There are a few things to consider. Firstly, analysts have been going bold with iPhone predictions since Apple toppled all records just under a year ago, and while sales this three month period did miss expectations, sales are still up on last year. So, has Apple finally hit the ceiling, have iPhone sales topped out?
Of course that is a possibility, but we have been saying for some time that after that record busting fourth quarter last year that the only way was down. We will see how well Apple performs over the Holiday Season this year and indeed how the company performs when the iPhone 7 is released next fall. All we know is, those predicting this is the first step in Cupertino’s ultimate demise will be left wanting... it isn't happening.
On the numbers, Apple shifted 48.04 million iPhones through the period ending September 30, which is vastly higher than the 39.27 million iPhones sold through Q3 of 2014. It is worth noting that this is Apple's quietest period traditionally as consumers await the launch of a new iPhone. That the company can shift tens of millions of units that are coming to the end of their cycle as a flagship is impressive and something no other company can do. That does not please analysts, and probably not investors in the short term, as Wall Street predicted sales of 48.72 million units to be sold.
While the iPhone will continue to defy analysts in the future, the iPad is apparently on a downward spiral that seems irreversible, unless the iPad Pro and Apple's deal with IBM perform miracles... unlikely. The slate is still the best selling on the market, but like the wider tablet sector it is on the decline as consumers simply do not upgrade these products in the way they do smartphones.
That very problems was something the PC had to contend with and why the computing market is a mere shell of what it used to be. The iPad dropped another 20% in sales, but that bad news hardly stopped Apple from raking in cash, the beauty of high margins.
The company continues to make profit like no other mobile brand, posting income of $11.12 billion over the third quarter (which, incidentally, was Apple’s fiscal Q4), up from $8.47 billion last year. Overall revenue sat at $51.50 billion, a 22% increase.
