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The 5 biggest takeaways of Apple's Q3 2015 quarterly earnings

Jason Snell | July 23, 2015
Another quarter, another happy financial report from Apple. The company's third financial quarter is rarely the place where you expect to see records--in Apple's largely seasonal business, the period from April to June is generally the sleepiest quarter--but there was still a lot to be gleaned from the numbers, and from the following hour-long call with financial analysts.

The Mac keeps growing in a shrinking PC market

Apple sold another 4.8 million Macs last quarter, which saw the introduction of the new retina MacBook. The Mac market isn't growing spectacularly, but it is growing. As Cook put it, the Mac is showing nine percent growth in a market that market-research firm IDC estimates contracted by 12 percent.

This has been the quiet story of the Mac the last few years, hidden by all the hype of the iPhone and iPad. The Mac is the shining star of the PC market, growing unit sales and revenues in a market that's shrinking. After a slow year in fiscal 2013, the Mac has bounced back in the last seven quarters. It's never going to be the iPhone, but it appears to be a steady, profitable business that's been remarkably resilient in an otherwise troubled product category.

The iPad continues to struggle, but Cook still believes

Apple sold nearly 11 million iPads during the quarter, generating $4.5 billion in revenue not a bad business. But those numbers are down substantially from the same quarter a year ago, and that's not a good sign. iPad sales are still tailing off, not stabilizing.

But Tim Cook is still a believer. He even took a digression during a question about iPhone growth to give one of his regular pep talks about why he thinks the iPad still has a strong future. In addition to Apple's iPad-focused enterprise partnership with IBM, this time Cook was able to cite the new iPad productivity features that will come with iOS.

But in the end, it's all about finding a time when people who already own iPads will decide it's time to buy a new model. "I believe that the iPad consumer upgrade cycle will eventually occur," Cook said, "because as we look at the usage statistics on iPad, it remains unbelievably great. I mean, the next closest usage of the next competitor, we're six times greater. And so these are extraordinary numbers. It's not like people have forgotten iPad or anything, it's a fantastic product."

So in the iPad's list of assets: People who use it love it, and it's far more used and loved than any of the other tablets on the market. The question is, is the ultimate size of the iPad market much smaller than any of us initially believed? Cook doesn't think so, but all he's got to go on are customer-satisfaction statistics and his gut feel. The numbers, on the other hand, aren't yet showing any signs of turning around.

 

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