Record iPad sales help Apple enjoy revenue, profit growth

Phillip Michaels
25 July, 2012
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Sales of the new iPad helped Apple’s bottom line during its fiscal third quarter, as the company tallied record revenue for its June quarter.

Apple’s sales hit US$35 billion for the third quarter of 2012, up 22 percent from US$28.6 billion last year while profits rose 20.5 percent  to US$8.8 billion from US$7.3 billion. Earnings for the quarter were US$9.32 a share, up 20 percent from last year. Reported earnings topped Apple’s forecast, but fell short of Wall Street expectations of US$10.35 per share on projected revenue of US$37 billion.

Apple sold 17 million iPads during the quarter, the most the company has ever sold during a quarter. The company tallied June quarter records for both Mac and iPhone sales – the latter figure coming even as customers have held off on purchasing a new iPhone in anticipation of a new model coming out later this year.

Despite the sales records, the third quarter saw the slowest growth rate for profit since 2009. Still, Apple finds itself better positioned than most tech companies. Sales of Macs, for example, during the quarter while the rest of the PC market saw a one percent decline, according to figures from market-research firm IDC.

Peter Oppenheimer, Apple’s chief financial officer, told analysts during a conference call that the company was “pleased” with its quarterly results.

Record iPad figures

The number that probably pleased Apple the most came from its surging iPad business, where Apple saw sales of its tablet grow 84 percent from the year-ago quarter. This was the first full quarter of sales for Apple’s third-generation iPad, which debuted on March 16. Apple is currently selling iPads in 97 countries.

Recognised revenue from the iPad lineup hit US$9.2 billion for the quarter, up 53 percent from the US$6 billion in revenue Apple recorded last year. Apple says it sold twice as many iPad as Macs to its education customers – and Apple just happened to set a record for Mac sales to US educational institutions for the quarter.

Apple’s iPad growth came amid stepped up competition from other tablet makers, particularly those using the Android operating system. “We have seen many different tablets, hundres in the last year,” Apple CEO Tim Cook told analysts. “And I have yet to see any of them gain any traction at all.”

Cook credited the size of Apple’s App Store, which now has more than 650,000 apps. Of that figure, 225,000 have been optimised for the iPad. “Most customers feel that they’re not really looking for a tablet, they’re looking for an iPad,” Cook said.

Mac numbers

As for its Mac business, Apple sold four million computers, up slightly from the 3.9 million Macs it sold in the year-ago quarter. Even with slight two percent gain, Apple still sold more Macs in this three-month period than in any June quarter before.

Those sales were largely driven by the revamped MacBook Air and MacBook Pro models Apple released, even though those notebooks came out less than three weeks before the end of the June quarter. According to Cook, prior to the release of those models at June’s Worldwide Developer Conference, Apple’s Mac sales were off last year’s pace. Once the updated MacBooks hit the market, though, Apple’s weekly sell-through increased, allowing it to beat last year’s figure and outpace PC industry growth for a 25th straight quarter.

In particular, Cook noted that the MacBook Pro with Retina Display has been “incredibly well-received. We still have not caught up with demand, but we anticipate doing so next month.”

Mac sales are usually dominated by portables, and this quarte was no exception. Notebooks accounted for three-fourths of the Macs Apple sold.

In addition to the June record for overall Mac sales, Apple executives noted that the quarter was the best ever for Mac sales to US education institutions.

Apple also set the stage for ongoing Mac growth in the current quarter, as it announced that Mountain Lion, the next major update to OS X, will ship tomorrow.

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