Apple reported 3rd quarter earnings yesterday after the closing bell that beat estimates, led by strong revenue gains in China that more than doubled but the company’s shares fell over 6 percent in afterhours due to iPhone sales that missed estimates along with softer guidance for next quarter and questions about how strong sales were with the new Apple Watch.
The Apple Watch debuted in April but the total units sold for this quarter wasn’t officially released and was kept quiet.
The closest glimpse to figuring out how robust sales were with the Apple Watch is by viewing the “other revenue” category which includes sales of Apple Watch alongside the iPod and Beats headphones .
Revenue in this category rose to 2.6 billion from 1.77 billion last year when there was no Apple Watch contained in the quarterly report.
Analysts were forecasting Apple Watch sales of 1.84 billion this quarter.
So based on the calculations, sales of the Apple Watch missed estimates.
Apple CFO Luca Maestri said during the conference call that in the first nine weeks that the Apple Watch was available,”we have sold more Apple Watches than we sold iPhones and iPads when they were launched.”
Apple sold 3.3 million iPads in the fiscal third quarter of 2010 after they were first debuted on April 3, 2010.
It appears that Apple sold over 3.3 million Apple Watch units, based Maestri’s comment.
Apple Watch is now available in 19 countries and research was cited during the conference call showing that 94 percent of Apple Watch customers wear the device on a regular basis.
Sales of Apple’s iPhones, which are the most profitable product for Apple, totaled 47.5 million in the quarter, up 35 percent year over year but slightly below the 49 million units that analysts’ estimated.
Apple sold 4.8 million Macs, representing 9 percent year over year growth and capturing greater market share amid a global PC market slowdown.
“As we have done for several years in a row, we continued to gain significant market share based on IDC’s latest estimate of a 12% global PC market contraction. Mac growth was driven by portables and we are delighted with the very strong customer reception of our new MacBook” said Maestri during the conference call.
Sliding iPad Sales
Apple’s iPad sales continue to sink.
Quarterly sales were 10.9 million units for the quarter, an 18 percent decline from a year ago and touching a 4 year low.
The iPad is a more expensive tablet on the market relative to others and Apple’s larger screen sizes with the iPhone 6 could be another factor as to the slowing demand.
iPad sales represented only 9.1 percent of Apple’s total revenue this quarter, a significant drop from a year ago last quarter when it represented 15.7 percent.
For the quarter, Apple posted quarterly revenue of $49.6 billion and net profit of $10.7 billion, or $1.85 per diluted share.
China posted growth of 112 percent with revenue over $13 billion.
Apple plans to have 40 stores open in China by mid 2016.
Guidance for next quarter includes revenue of $49 to $51 billion, below consensus estimates of $51 billion with gross margin between 38.5 percent and 39.5 percent.