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 It sold 35.2 million iPhones in the June quarter, a rise of about 13
percent that was in line with analysts' projections, helped by a
strong performance in an Asian market considered crucial to Apple's
longer-term growth prospects.
Chief Executive Tim Cook told analysts on a conference call that
Apple's Chinese performance was "honestly surprising." Unit iPhone
sales jumped about 48 percent and Mac computer sales rose 39 percent
in the June quarter, Chief Financial Officer Luca Maestri said in an
interview.
Lower-cost phones sold there by up-and-coming rivals such as Xiaomi
appeared to be grabbing market share mainly from other companies
that rely on Google's Android software, he added.
This month, Samsung Electronics Co Ltd estimated April-June
operating profit far below most analysts' forecasts, as its Galaxy
S5 sold more slowly than expected in the face of severe competition.
"We have a really good runway in front of us with China Mobile,"
Maestri said, referring to Apple's main carrier partner in the
world's No. 2 economy. "Given our numbers in China, it would seem
their success is coming from other Android devices."
TAPERING
Apple iPhone sales tail off in the quarters before a new smartphone
launch, as potential buyers hold off. Maestri said the company had
taken the usual lull into account in its projections for the
September quarter.
Despite a surprisingly robust Chinese market, Apple continues to
struggle in the more saturated, developed regions of the United
States and Europe, its two largest markets.
It forecast revenue of $37 billion to $40 billion this quarter, weak
compared with Wall Street's outlook for $40 billion or more. But
whether Apple can again produce a revolutionary new product,
something it has not done since the iPad in 2010, remains the
central question for investors.
Many expect Apple to make a play for the wearable device market with
a smart watch, dubbed iWatch.
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Analysts also expect the company to introduce two iPhone versions
this fall, including a 5.5-inch model that thrusts Apple into the
market for larger-sized phones that rival Samsung helped popularize.
The iPhone maker, which derives most of its business from the
high-end device, reported sales of $37.4 billion in its fiscal third
quarter ended June, falling short of Wall Street's expectations for
about $38 billion.
Sales of iPads, which like smartphones are coming under growing
pressure from Android rivals, at 13.3 million fell a little short of
analysts' projections for more than 14 million.
Gross margin, however, was better than expected at 39.4 percent, up
from 36.9 percent a year ago, primarily due to cheaper product
costs.
Net income jumped 12.2 percent to $7.75 billion, or $1.28 per share.
That beat expectations for $1.23 and was its best quarterly growth
in EPS in seven quarters.
Apple shares slipped 0.8 percent to $94 after-hours.
(Reporting by Edwin Chan and Christina Farr; Editing by Richard
Chang)
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