Yesterday, everybody's favorite fruit company came out with its Q3 numbers, for what is arguably the slowest quarter of the year. A few observations :- 1. Its been a long time since Apple released any new products. Holding on to last year's numbers is commendable.
2. The iPhone numbers were the highlight of this earnings report. Contributing over half of revenues, and growing in a typically sluggish quarter is fantastic news. This might be fueled by the migration of smartphone users from other platforms. As people start using smartphones more and more, Apple benefits more and more.
3. The iPad numbers were a disappointment. The iPad and other tablets put together, provide the logical reason for the drop in PC sales. With fewer iPads sold than in the same quarter last year, it is a signal that a refresh is necessary, especially since Apple does not do discounts.
4. This quarter demonstrated the importance of Mac for Apple. With the average iPhone selling for $581 and iPad at $436, Mac has the highest average selling price at $1303. Clearly Apple needs to bring its focus back on the Mac before the holiday season sets in.
5. Europe, China & Asia Pacific dragged down all the growth in Americas & Japan. For some strange reason Japan grew by 27%. No idea why...
6. iTunes software & services revenue grew more than the iPhone sales, even though there was a drop in the iPad sales. This is a good sign. It probably means all the older iPads & iPhones and other iOS devices are still being used and new apps are regularly being purchased. Or maybe this is because iTunes is now available in more markets than last year.
A few predictions
1. It looks like September is going to be huge for Apple. My guess would be that iOS7 wont be the only new launch this fall. A new iPhone and an iPad refresh is probably in the pipeline.
2. A price correction on the MBP Retina Display would give the Mac sales a much needed boost. The recent MBA refresh added more memory to the base model. I suspect we will see a price correction across the Mac lineup.
3. Even if the US market is saturated for Apple, the Americas still grew a very healthy 12% year-on-year. I think the smartphone displacement cycle has begun in USA. Apple has a few good aces to win that battle, with the App Store chief amongst them.
Finally, did you notice that the data summary PDF download for the quarter results was an xlsx? Who knew...