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Apple Sets 3Q iPhone Sales Record, Sees iPad Sales Slip

Tue, 07/22/2014 - 5:48pm
Ben Munson

Apple sold 35.2 million iPhones during its third quarter, just missing analyst estimates but handily beating the June quarter record of 31.2 million sold during the year-ago quarter

The 13.3 million iPads Apple sold during the quarter fell below estimates. The total was down annually from 14.6 million.

CEO Tim Cook attributed the downturn in tablet sales to softer international markets and inventory reduction. Apple CFO Luca Maestri said inventory reduction on a smaller scale also negatively impacted iPhone sales.

Apple posted record third-quarter revenue of $37.4 billion on $1.28 earnings per share. Although revenue missed, EPS was ahead of analyst estimates.

Apple forecast fourth-quarter revenue of $37 billion-$40 billion, slipping below the $40.4 billion consensus.

Part of the impact on future earnings was attributed to the deal for Beats, which Apple expects to close next quarter.

Maestri reiterated the company’s excitement about what’s in the product pipeline. With much focus normally now on the expected iPhones and rumored iWatch, Cook took time to address how Apple will grow its iPad business. He noted iPad’s 76 percent market share in the commercial sector, but he admitted that the penetration rate is low. To that end, he was enthusiastic about the new partnership Apple just formed with IBM in order to extend reach into the enterprise space.

“I honestly believe the opportunity is huge,” Cook said.

Cook also pointed toward iPad’s large success in the education space as a growth driver particularly as the start of a new school year looms. He said iPad grew well in lesser developed markets like China, which helped to offset its downward trajectory in developed countries.

Apple shares were down 0.5 percent in after-hours trading as of 4:42 p.m. CT.

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