Apple’s Q3 numbers: All-time high Android switching, record revenue, Apple Watch stats, & more

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Apple just announced its fiscal third quarter earnings and as usual offered some stats on progress since last checking in. Among the notables: the company’s revenue in China is up 112%, it returned $13 billion to shareholders through its capital return program, and it sold a record number of iPhones and Macs during the quarter. The company, citing its own research, noted that users switching from Android to iPhone was at an all-time high, while giving us some insight into Apple Watch usage. Head below for the full roundup of numbers from today’s earnings call:

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-$202.8 billion in cash (over $200B for the first time)

-$49.6 billion revenue/$10.7 billion profit

-47.5 million iPhones sold (revenue up 59% from last year)

-10.9 million iPads sold (revenue down 23% from last year)

-4.7 million Macs (revenue up 9% from last year)

-$5 billion revenue for services (iTunes, AppleCare, Apple Pay, licensing and other services.)

-App Store revenue more than doubling during quarter

-Greater China revenue up 112% (vs 33% growth for Apple worldwide)

iPhone sales up 85% in China and India

-$13 billion returned to shareholders

$15 billion cashflow from operations

-iPhone revenue up 59 percent over last year

456 total retail stores, 190 outside US

-40 stores to open in China next year

-94% of Apple Watch users wear and use it regularly

-Android switchers at an all-time high

-1.5 million Apple Pay locations by end of year

United giving iPhones to 20,000 flight attendants

-13 new enterprise apps through IBM partnership, 100 total by end of year

-15,000 artists are signed up for Apple Music Connect feature

-700 universities and colleges will begin accepting Apple Pay this year

-Guidance for the fourth quarter: between $49 billion and $51 billion in revenue

More coming… refresh please

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Comments

  1. longerthanlong - 8 years ago

    Wow, great numbers!

  2. Teapot - 8 years ago

    Remember kids, Apple are doomed. They’re headed straight to oblivion, Tim Cook can’t lead, etcetera. These numbers just prove it. /s

    • lkrupp215 - 8 years ago

      Don’t forget, Steve is dead too.

      • Dafty Punk - 8 years ago

        WAIT WHAT?!

      • vandiced - 8 years ago

        Don’t you mean “Steve Jobs ARE dead”?

    • techkritic - 8 years ago

      And yet AAPL is down 7.7% in after hours trading. Apple is “doomed” because maintaining its ridiculous profits is not good enough for shareholders. They want to see huge growth continually. Given the limited worldwide market for expensive Apple devices, once market saturation is hit, revenue growth will be very difficult. Logically, they will still be doing better financially than anyone else, but investor perception will tank the stock price.

      Once saturation is reached, they can only increase revenue by further cutting costs on their hardware which is already sold at an enormous margin – if they go much lower the quality will suffer.

      They could release new high margin products that won’t cannibalize existing products. That was the entire purpose of the Apple watch, and so far, all indications are that it has yet to pan out for them. It’s possible that version 2, will change things, but they may also need to reduce the ridiculous markups.

      They could develop cheaper products to increase the size of their consumer base. Those products would need to have much lower margins though, and the end result would likely be insignificant on their balance sheet. It could also hurt their brand image, and cannibalize sales of the flagship iPhones – and the latter is something they can’t afford to risk.

      They need an Apple Watch type product to take off. They really got too obnoxious with the price gouging on Apple Watch. At $200 or $250 retail with an ~$85 bom, they’d still have a very large profit margin and it would appeal to a wider market.

      • rnc - 8 years ago

        “They want to see huge growth continually. Given the limited worldwide market for expensive Apple devices, once market saturation is hit, revenue growth will be very difficult. Logically, they will still be doing better financially than anyone else, but investor perception will tank the stock price.”

        Their revenue growth contradicted what you said, they had 33% growth over year.

        It’s the media that has their agenda, to drop AAPL shares, nothing besides media manipulation.

      • techkritic - 8 years ago

        You’re misinterpreting what I wrote. I’m not denying massive YOY growth this year. It’s right in the article haha. The market has NOT yet reached saturation. It may not for another few years, I honestly don’t know because I haven’t gone through the data myself. I would hope these analysts are doing that.

        The majority of the current YOY growth is due to sales in China and other international markets that were entered recently. Those markets were far from saturated, but that’s starting to change now. On top of that Apple’s high prices mean that there are a limited number of markets that they can enter, all of them paling in comparison to China.

        Growth hasn’t dropped off yet, but Apple hasn’t proven that they have a workable plan to maintain growth once the market does become saturated. And as of now, the perception (no definitive data yet) is that the Apple watch is not a solution. This is why the price is dropping, it’s all about perceived future prospects for the stock, and right now that’s very much up in the air. There’s no disputing the present is fantastic.

        “It’s the media that has their agenda, to drop AAPL shares, nothing besides media manipulation.”

        You’re kidding right? The media loves Apple, and most of the tech media is literally afraid to say anything negative about the company’s products or practices. Like how quickly the iCloud hack was glossed over – “Apple says it wasn’t their fault. I have no further questions. Woo iPhone 6 next week! Surely that’s not a conflict of interest… No need for an independent review, or God forbid, transparency.”

        I suppose finance related blogs have much less to worry about, since they don’t care about getting event invites and they don’t have apps that will be arbitrarily rejected with no explanation. However, they talk about Apple stock just like they talk about Google stock – critically. Until just a few days ago it was that Google’s advertising model was failing in the mobile era. The Apple story is that their entire company is dependent on a single product, and they haven’t released anything very successful since then.

        Headlines about “failing” get more clicks and thus revenue. IF you see more stuff about Apple it’s because more people are interested in Apple, not some attempt to take Apple down. Also, depending on where you get your news from it may be targeted to you as an Apple lover and thus show mostly Apple articles…

      • There are billions of new clients to convert.

      • techkritic - 8 years ago

        Billions? There aren’t even One billion people on the world that could afford to buy a new iPhone if they wanted to. Unless you think Apple is going to start selling devices at a “meager” 50% profit margin.

    • vandiced - 8 years ago

      Apple IS doomed. Not “are”

  3. taoprophet420 - 8 years ago

    40 stores in China sounds like a huge number.

  4. macnificentseven48 - 8 years ago

    Apple screwed the pooch yet again. The pooch being Apple shareholders. Thanks, Tim, for another “AMAZING” quarter where shareholders lose 8% after hours as they’re settling down to have a nice relaxing supper. It’s getting to be quite a habit where investors are disappointed by Apple earnings. Tim Cook seems to be confusing the words amazing and disappointing every quarter. Well, I already realized Apple isn’t Google or Amazon, so Apple’s quarterly results were likely going to turn sour and they did.

    • babywrinkels - 8 years ago

      On the one hand, you’re clearly trolling and I don’t want to feed you.

      On the other hand…

      Apple beat analysts expectations by $100,000,000 and their own guidance by $1,600,000,000. The fact that the stock is falling mean it’s time to buy in. It will continue to grow and increase, and the only people screwed are those selling right now because they’re scared of a drop.

      If beating analyst expectations and internal guidance is a disappointment, I don’t want to be satisfied,

    • auntietroal - 8 years ago

      “Investors” don’t get fazed by after-hours numbers on Apple earnings release days.
      “Investors” have made a 50% return on Apple stock this year.

      Perhaps you aren’t an “investor”?

    • flaviosuave - 8 years ago

      Apple didn’t screw anything. They posted record quarterly profits. Direct your ire at Wall St. investors and the inanity of the stock market. Big hint: a stock price has very little to do with a company’s actual performance, and a lot to do with analyst and hedge fund manager “expectations.” You play the market at your peril if you don’t realize and come to terms with this.

  5. samuelsnay - 8 years ago

    Apple beats Wall Street expectations AGAIN, stock falls.

    Google beats Wall Street expectations for the first time in forever, they literally set a record for the amount of money a company’s value increased in a day.

    Insane.

    • auntietroal - 8 years ago

      Try not to look at it as a matter of fairness. Instead, treat it as an opportunity, if you can.
      They say that success is the best revenge, and if so, Apple investors have had a lot of revenge.

    • techkritic - 8 years ago

      Not insane.

      Google’s price soared because, for some time now, analysts, journalists, tech bloggers, really everyone has been questioning whether or not Google’s business model can survive in the Mobile-first Era. The latest Google earnings showed that yes, it absolutely can. If Google’s model is viable, revenue will increase as mobile device usage increases worldwide, so that means that the future looks pretty bright for Google (theoretically of course).

      Apple has been delivering huge earnings growth for years now, and that is the driving factor behind its stock price. However, as such, profits leveling off at their current insane levels isn’t good enough for investors. Apple is quickly reaching market saturation. Much of their recent success is from the move into China, after China and the other wealthy markets in the world are saturated, how will they maintain growth? With another high margin product that won’t cannibalize existing sales – Apple Watch. Only it’s not a necessity for anyone. Reviews have been lackluster, and the early speculation is that sales haven’t been great (surely better than the competition, but that’s not good enough for Apple). Especially for these Wall Street guys – they’re used to seeing everyone with the latest Apple gadgets right away, yet they see few App Watches. It’s at least a perceived failure.

      The future looks questionable for Apple. The future did look questionable for Google and has now become more certain. That’s why Apple went down and Google went up.

      And it’s kind of ironic that you think a company that sells a $200 phone for $700 and an ~$85 watch for $350, claiming that technology from two years ago is “revolutionary,” is being treated unfairly. Then there’s crippling the base model iPhone with no memory, chipped connectors to force accessory makers to give them a cut, use of propriety standards to create lock-in and extort hefty royalties, completely unfair and arbitrary treatment of the developers who made their platform what is, and the list goes on.

      • PhilBoogie - 8 years ago

        “I see what you did there”

      • techkritic - 8 years ago

        And by that you mean, “provided rational and intelligent theories about the factors driving Apple and Google’s stock prices”? And “being sure to point out how profitable Apple’s business is today, more than once, since the people who are filling up that cash hoard are very prone to getting emotional and rejecting any logical argument.”

        Then there’s pointing out the hypocrisy of saying that Apple is being treated unfairly when it doesn’t treat anyone else fairly, especially behind closed doors and mandatory NDAs. In hindsight, that wasn’t really directed at the guy who started this comment thread. I confused him with the guy who thinks there’s a media conspiracy to tank the Apple stock. If there is, there was previously a conspiracy to inflate the Apple stock price.

        In all seriousness, Apple stock is doing insanely well right now, so it is a bit ridiculous that investors would overlook that and instead base it’s current value on the unpredictable future. However, that’s how the market works, and being that Apple was “smarter than everyone else and went for profit share over market share in the mobile market,” they are absolutely aware of the factors that drive the stock price, so how are we to interpret the current situation? Either they’re failing at what they do best, or they didn’t got lucky and didn’t actually set out with a deliberate “profit share” strategy, just a very egotistical CEO.

      • lin2logger - 8 years ago

        “an ~$85 watch for $350”

        Wow… you really don’t a CLUE what you’re going on about. It’s painful.

        Troll much?

      • techkritic - 8 years ago

        Please, provide me with the facts. I want to learn! You know exactly what I’m talking, I’ve personally read teardown reports from two different firms that place the cost of both sizes of the sport model below $85. That includes all materials and assembly. Is there another BOM teardown report I’m not aware of? Please reply with the link. Yes, we are not factoring in R&D costs here.

        So without another source, we’re agreed that the materials and assembly for the sport model is, put generously, $85?

        So, now youre going to tell me that Apple’s R&D cost is substantial, leading to much lower margins, right? Let’s see how Apple’s R&D spending stacks up with the competition and other unrelated companies. Surely a company as devoted to innovation as Apple devotes tons of resources to R&D. Why don’t you check out this chart for 2013 created by the European Union (I know sketchy source /s) http://goo.gl/ziZyUa. Apple is at the very bottom of the list and spends less than even HP. And note, these are absolute values, not a percentage of revenue or profits. Despite being the most profitable company in the world Apple commits an incredibly small amount of money to R&D.

        Now you’re going to say, that’s because Apple is smarter and “more focused.” We’ll come back to that. Being smarter and more focused does not affect the margins on any product, margins are only the money received minus the money spent. So why are the margins so much lower than the BOM would indicate? And how much lower? Is it intellectual property expenses? That would also show up on the balance sheets, and we all know that Apple will do just about anything to avoid paying tribute to others for their work.

        And also realize that Apple will include anything they possibly can as an R&D expense. The international profits are easy to route to offshore tax shelters, but it’s harder with money made domestically. As such anything that could possibly count as an expense is declared. Taking interns out to lunch, having bird shit cleaned off the engineers cars (jk) etc, you name it.

        Apple watch is a new product, so theoretically the R&D expense was higher, but that’s not our problem as customers. Also it’s not reflected on the balance sheets, or that just means they’re spending even less than we thought on Mac and iPhone R&D. That would actually make alot of sense given the recent software releases :P

        The iPhone on the other hand sells over 200 million nearly identical units each year, so they have greater economies of scale than any other electronic product in history. Even overlooking the fact that iOS is the simplest mainstream OS in terms of features and the fact that there’s almost no hardware variability to design around, given the number of units sold, the cost of software development is completely insignificant. Literally a few dollars per iPhone. So you can feel free to say it costs $205.

        So why does Apple claim to have an overall profit margin below 40%? They’re including all the expenses of running their retail stores, running advertising campaigns on TV and elsewhere, hiring agencies to create advertising campaigns, and of course paying the timepiece historians that were so necessary for the development of the Apple Watch. I’m sure if you own an Apple watch, it’s clear that a timepiece historian was involved, right? Fantastic use of that tight R&D budget. And I forgot, that also deducts the taxes that they haven’t been able to dodge around the world as an expense. Don’t worry, despite printing “designed in California” on every product, they “operate” out of Nevada last I checked, so they don’t pay CA taxes despite capitalizing on the goodwill.

        And here’s the article that chart is from. http://goo.gl/GqiPyk

        Note where Samsung ranks on that list? That’s not because of their flawed mobile strategy. It’s because they are the ones who design and engineer the majority of the components that make modern smartphones possible. Apple on the other hand thinks developing actual technology is a waste of time. Let the nerds waste their time and money hashing all that stuff out. We’ll tell the loyal following that it isn’t “compelling” until after they’ve done all of the real work and we can get it dirt cheap.

        I trust you all own enough Apple stock and bought it early enough to offset the huge markups you pay? Then there’s the resale value, right? A “Coach” or “LV” bag is more functional than any other bag because it retains more value in the second hand market, right?

        I eagerly await your response @lin2logger. I assure you I am not a troll, unless that’s now defined as someone who presents facts to those who do not want to hear them. Being that you’re an Apple expert, I’m sure you’ll have hard facts to prove each point I made wrong. Please don’t waste our time with a baseleas emotional response.

        And by the way, all of the things I just described, while horrible for consumers, are great for Apple’s stock! This is why they’re the most valuable company in the world. Personally, I’m willing to profit off of suckers, but that doesn’t mean I’m going to join the party.

  6. Winski - 8 years ago

    AND Wall Street HATED THE REPORT !!! ATED IT!. Almost $100 BILLION OF MARKET CAP – ERASED!!! After hours, the equity got MURDERED…. and We, the lowly shareholders got crushed.

    Thanks Tim – YOU SUCK.

  7. Winski - 8 years ago

    AND Wall Street HATED THE REPORT !!! HATED IT!. Almost $100 BILLION OF MARKET CAP – ERASED!!! After hours, the equity got MURDERED…. and We, the lowly shareholders got crushed.

    Thanks Tim – YOU SUCK.

    • lin2logger - 8 years ago

      You’re just a lowly, clueless, blathering TROLL. Not to be confused.

  8. daniesy - 8 years ago

    Apple is making money now without doing anything. It’s like that Futurama meme: “shut up and take my money”!

    • lin2logger - 8 years ago

      “without doing anything”

      LOL!! The trolls are getting worse by the hour.

      Poor jealous little baby.

      • techkritic - 8 years ago

        You’re right about this guy being a troll, but it’s a fact that Apple spends an incredibly small amount on R&D – that is design of the “revolutionary” hardware and software. Much less than other tech companies in even an absolute measure. If you compare as a percentage of profits or revenue, it is off the charts how little Apple spends. Even if each employee was twice as efficient as an employee at another top tech firm, they would still be doing aa fraction of the work.

        How can they do this? They’re not a tech company. They don’t develop technology. They wait until others do the years of hard work and invest billions, then when the prices hit rock bottom, they copy or buy the technology (sometimes patent trolling the company to force it to sell for pennies on the dollar) and present it a “revolutionary Apple creation.

        They’re a successful industrial design and marketing firm. The fact that they actually do so little and make so much is why the stock has been so successful. Actually, the same thing that made them successful is what’s hurting the stock as of late. They’re products are incorrectly perceived as much more valuable than they actually are. Now, the stock is incorrectly perceived as less valuable than it actually is. There order to the universe after all!

      • daniesy - 7 years ago

        I’m sorry. You’re right. They’re gladly taking our money. My bad.

Author

Avatar for Jordan Kahn Jordan Kahn

Jordan writes about all things Apple as Senior Editor of 9to5Mac, & contributes to 9to5Google, 9to5Toys, & Electrek.co. He also co-authors 9to5Mac’s Logic Pros series.