Apple Profits Fall in Q3; Wall Street Feels It’s Okay | TechTree.com

Apple Profits Fall in Q3; Wall Street Feels It’s Okay

However, the actual numbers continue to decline, suggesting demand saturation for its products

 

Apple reported a 27 per cent fall in its quarterly profits, but still managed to keep the markets happy with a revenue figure of USD 42.36 billion for Q3 2016. That this figure was lower by 14.6 per cent to what the company achieved a year ago at USD 49.6 billion seems to have been taken as par for the course.

Commenting on the results, CEO Tim Cook said that the third quarter results “reflect stronger customer demand and business performance than we anticipated at the start of the quarter.” The company had pegged its Q3 revenues in the range of USD 41 and 43 billion with profits of around 37.5 – 38 per cent.

He further said that the iPhone SE strategy was now working well and had helped meet the needs of the customers who loved a four-inch phone as well as to attract even more customers within the ecosystem, according to a report published by CNBC (read it here).

However, there has been an obvious decline in the demand for the latest iPhone series – the 6S and the 6S Plus with customers continuing to prefer Apple’s First phones with the 4.7 and 5.5 inch screens that came out nearly two years ago christened the iPhone 6 and the iPhone 6 Plus. 

The company however managed to ship more phones than the market anticipated. It shipped 40.4 million phones as against the expectation of 40.02 million garnered by StreetAccount estimates.

Cook also highlighted a decline in overall phone sales in China during the quarter, down 33 per cent to 8.8 billion. He attributed it to a fall in general economic conditions and pointed out that China Mobile had asserted the presence of more iPhones on their network than other brands.

The Apple CEO said he had visited China and India in the previous quarter and was quite encouraged about the growth prospects in these two countries. “We remain very optimistic about the long-term opportunities in greater China while India has huge potential, leading Apple to seek retail stores in the region.

There was good news on the services front as well with Apple Services revenues growing 19 per cent during the third quarter with the app store hitting an all time record. “Services will be the size of a Fortune-100 company by next year,” Cook promised.

Other products, including Apple TV, Apple Watch Beats Products, the iPod and other accessories together brought in revenues of USD 2.2 billion, which was down by USD 2.6 billion from a year ago. For the next quarter, the company has predicted revenues between USD 45.5 billion and USD 47.5 billion. 


TAGS: Apple, Tim Cook, Wall Street, revenues

 
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