Apple reported its third quarter earnings today, putting another period of eye-popping profits on the books. Investors were eager to glean any details about how well the new Apple Watch sold, but the bulk of the company's revenue is still coming from its trifecta of iPhone, iPad, and Mac sales, with digital goods and services a close fourth. Apple generated $49.6 billion in revenue, slightly above analysts' expectation of $49 billion. It earned a profit of $10.7 billion, trailing its record of $18 billion that it set during the first quarter of this year.
The consensus among analysts was that Apple would sell around 4 million Apple watches during this quarter. But given the wide range of prices on different models of the Apple Watch, and the fact that revenue is lumped into a larger bucket that includes sales of devices like the iPod, Apple TV, and Beats hardware, it is difficult if not impossible to work out exactly how many were sold.
Apple sold well over $1 billion in watches during its first quarter on the market
What we can say is that the revenue for "other products" jumped to $2.64 billion, well above the $1.76 billion Apple earned for that category during this same period last year. Apple CFO Luca Maestri told The New York Times that sales for the Apple Watch "in its first nine weeks exceeded those of the iPhone and iPad in their first nine weeks of availability." Maestri also told the Associated Press that revenue from Apple Watch sales was well about the $952 million increase in "other product" revenue, as revenue declined for the iPod and other accessories. In other words, Apple sold well over $1 billion in watches during its first quarter on the market.
iPhone sales continued to be the biggest area of growth for Apple, amounting for nearly 70 percent of its operating income. Apple sold 47.5 million iPhones in the third quarter, up from 35 million during the same period last year. But analysts had been expecting sales of around 49 to 50 million units, and Apple shares were down about 7 percent in after-hours trading.
A tale of two curves pic.twitter.com/cax7fH0w9v— Benedict Evans (@BenedictEvans) July 21, 2015
Apple also sold 10.9 million iPads this quarter, compared to 13.3 million during the third quarter of 2014. And it moved 4.8 million Macs, compared to 4.4 million this time last year. Greater China continues to be the biggest driver of new growth, with sales there once again up more than 100 percent year over year.
"We had an amazing quarter, with iPhone revenue up 59 percent over last year, strong sales of Mac, all-time record revenue from services, driven by the App Store, and a great start for Apple Watch," said Tim Cook, Apple’s CEO. He ended the earnings call on a high note, telling analysts that sales of the Apple watch in June were the highest of any month yet, demonstrating an increasing consumer appetite for the product.