Apple Hits It Out Of The Park With Its Q2 Earnings

Apple is making boatloads of money, but what about iPad and Apple Watch?

apple continues its eye popping growth though questions surround ipad and watch to make a boatload of money but the — Image used with permission by copyright holder

Apple reported its third quarter earnings today, and even though the company continues to announce record quarter results, questions still linger around the iPad, the Apple Watch, and even the iPhone.

As a whole, Apple generated $49.6 billion in revenue, with a net profit of $10.7 billion, all record figures for the third quarter of any given year. These numbers represent an increase from the $37.4 billion in revenue and net profit of $7.7 billion from the same period last year. As was the case with the preceding quarter, the bulk of this quarter’s revenue is still derived from iPhone, iPad, and Mac sales.

Mac sales, in particular, have Apple pretty happy, with the company selling 4.8 million Macs during the third quarter. Even though this number might not be all that impressive by itself, it resulted in a 9 percent growth in the PC sector for Apple, even as the market as a whole was believed to have shrunk by 12 percent worldwide.

Meanwhile, Apple continued to set record iPhone sales, with the company selling 47.5 million iPhones during the third quarter. This led to a 59 percent boost in iPhone revenue year-over-year. In addition, the 47.5 million iPhones represent an increase from the 35 million iPhones Apple sold during the same period last year. However, analysts expected iPhone sales of around 50 million, explaining why Apple shares actually decreased roughly 7 percent.

Where question marks linger, however, are around iPad and Apple Watch sales. For the quarter, Apple sold 10.9 million iPad units, a decrease from the 13.3 million the company sold in the preceding quarter. That sales result also represents the lowest number of iPads sold in over three years, which raises concerns about where iPad sales will be in the near future. With intensifying rumors about the so-called iPad Pro, as well as a renewed focus on the iPad with iOS 9, however, it looks like Apple is aware of the issue and is seeking to address it from a number of angles.

Of even more interest is the lack of concrete numbers concerning the Apple Watch. Having launched its first wearable back in April, Apple only stated during its earnings call that it generated $2.64 billion in revenue from “other” devices. This category, which includes the Apple Watch, iPod, Apple TV, and Beats hardware, doesn’t paint the full picture about how the Apple Watch by itself is performing.

However, talking to the Associated Press, Apple chief financial officer Luca Maestri said the Apple Watch generated sales well over the $952 million in revenue the “other product” category generated, which means Apple likely sold over $1 billion in watches during the third quarter.

Also unknown is how many users signed up for Apple Music, the company’s music streaming service that launched on June 30 with the release of iOS 8.4. The service experienced its first major hiccup earlier today, when users reported encountering issues with Apple Music and other services, such as the iTunes and App Stores.

Looking ahead, Apple expects to generate between $49 billion and $51 billion in revenue for the next quarter, which would represent an increase from the $42.1 billion revenue the company generated during the same time period last year.

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