iPad, Mac, and iPod Sales Fall as iPhone Soars

iPad, Mac, and iPod Sales Fall as iPhone Soars

Unfortunately, half of those iPhones are two- and three-year-old models

Apple on Tuesday reported its financial results for the most recent quarter and as with Microsoft and Google before it, the firm earned smaller profits as some of its mobile offerings experienced big sales declines. But better-than-expected iPhone sales buoyed shareholders, who seem happy to excuse the fact that half of those are two- and three-year-old iPhone 4 and 4S models.

“We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services,” said Apple CEO Tim Cook. “We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.”

Related: "Intel Hit Hard by PC Buying Trends"

Mac, iPad, and iPod sales didn’t fare as well as they did in the same quarter a year ago, a sign that Apple’s slow pace of new product introductions is starting to hurt the company. Mac sales fell from 4 million units in the same quarter a year ago to 3.8 million units. And iPad sales fell off a cliff for the first time, dropping from 17 million units last year to 14.6 million this year. That 14 percent fall-off is worse than that experienced in the PC industry in the quarter, and you’ll recall that most armchair analysts are describing that latter drop as a bloodbath. Sales of iPods fell to 4.6 million units, down from 6.7 million a year ago.

Aside from iPhone, Apple sold fewer of each product type than Wall Street expected. But of the iPhone’s 31 million units sold, about half were ancient iPhone 4 and iPhone 4S models, not the newer (but still almost one-year-old) iPhone 5, which presumably delivers higher margins for the firm. These factors all combined to help Apple’s quarterly net profit fall to $6.9 billion, down from $8.8 billion a year ago. Apple posted quarterly revenue of $35.3 billion, even with last year, and generated $7.8 billion in cash flow from operations during the quarter. And this was the second quarter in a row in which Apple reported a year-over-year profit decline.

Related: "Microsoft Announces Quarterly, Annual Financial Results"

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