Apple's Q3 2014 numbers are in. My observations on Apple's financial data -
- iPhone rules the company. Product revenue was up by 9% as compared to the last quarter but dropped 24% sequentially. People around the world held on to their battered and scratched phones for a few more months and wait for the next version of Apple's flagship product.
- Retail store sales are flat as compared to last year. This surprises me. Given Apple's focus in this area, I expected a healthy growth in retail sales as compared to last year.
- Sequentially, revenues from Greater China and Japan fell by 35% and 36% respectively. The early adopters pool has dried out in these markets.
- The iTunes/Software/Services revenue remained flat sequentially. Apple customers did not buy more content and services than last quarter. Next quarter numbers will tell whether this is a one off case or the content consumption has peaked in Apple's ecosystem.
- The Mac had a good quarter, almost equalling its so called disruptive nemesis in revenue. Yosemite announcement and Macbook Air price drop worked as the Mac reported a healthy 18% units growth compared to last year.
At my home, the iPad is used as the goto device for routine stuff. It is also the device my kid uses the most. I use the iPad mainly used for browsing and see no reason to upgrade to a new one within the next one year. My iPad is two years old and still works like a charm.
I believe the iPad will follow the TV replacement cycle. Still, only 13 million units sold in this quarter should worry Apple. Maybe IBM can fix this problem. We will see.