Apple's Q3 2014 numbers

Apple's Q3 2014 numbers are in. My observations on Apple's financial data -

  1. 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.
  2. 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.
  3. Sequentially, revenues from Greater China and Japan fell by 35% and 36% respectively. The early adopters pool has dried out in these markets.
  4. 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.
  5. 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.