Apple had brilliant Third Quarter Results – But Here’s Small Print

Apple announced its third quarter results last night.

The Key Points –

– The iPad and Services (iTunes/App Store) were the only growth areas. The iPad Pro helped with profit despite a downturn in actual number sold. Services had a boost due to the ever expanding size of the user base. iPhone and Mac numbers both declined. The iPhone had a significant boost from the iPhone SE, without this handset, iPhone sales would have been even lower.

– For Next Quarter’s forecast, more declines are forecast by Apple. Despite this Apple’s shares went up 5% because they smashed the analysts forecasts. Worth remembering the Apple still made $8 billion profit and that is still a lot of money! For Q4 2016, Apple is providing guidance of revenue between $45.4 billion and $47.5 billion, and gross margin between 37.5 percent and 38 percent.

– The Financials – $42.4 billion in third-quarter revenue , that’s a 15 percent year-over-year decline. iPhone shipments in China plummeted by 33%. Japan was Apple’s only growing region, where sales grew 23 percent. But these figures were better than expected.

– Profit down 27%.

– Apple Pay has had 400% growth

– Other Apple news – Apple bought ‘Carpool Karaoke’ Late Late Show segment and will release new episodes weekly via Apple Music.

So what does the future hold for Apple? Well at the moment it is selling loads of hardware, but the world is becoming saturated with iPhones etc and other companies have managed to build premium phones for a lot less money. When Apple introduces the new iPhone and other hardware will it be enough to stop the decline. Personally I don’t think so, but I don’t think it matters too much. I see Apple shifting more and more into the Services business – iTunes, Apple Music and such like. Unless Apple can find the next big thing hardware wise, hardware will continue to shrink very slowly.

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