Notes of interest from Apple's Q3 2014 conference call

By AppleInsider Staff

Apple on Tuesday fell just short of Wall Street expectations for its third fiscal quarter of 2014 amid disappointing results for the iPhone and iPad, though the Mac continued to outpace the PC market. Following the announcements, executives from the company participated in a conference call with analysts and the media, and notes of interest follow.

Participating in the call were Apple Chief Executive Tim Cook, and recently-appointed Chief Financial Officer Luca Maestri. Former CFO Peter Oppenheimer announced his retirement in March.

Highlights

Apple's iPhone business

35.2 million iPhone sales are the most ever sold in the June quarter

Apple believes new product rumors resulted in purchase delay

Tax and regulatory changes -- scheduled VAT increases and government instruction not to incentivize network switchers -- affected iPhone sales in Japan

iPhone in the enterprise: Medical device leader Metronic has developed more than 175 internal iOS apps deployed to more than 16,000 iPhones. Nestle has deployed more than 25,000 iPhones; NASA has more than 26,000

iPhone growing at 2x the overall mobile phone market in China

Apple believes iPhone trade-ins are "hugely beneficial" for the company's ecosystem, especially as it enables price-sensitive consumers in the same or different countries

Trade-in customers may be more likely to purchase another Apple product, but "difficult to quantify with certainty"

Apple "incredibly bullish" that customers on quick-upgrade plans from U.S. carriers will upgrade to new generations quickly

Apple's iPad business

Tim Cook says iPad sales met Apple expectations, but they "realize they didn't meet yours."

iPad sales were gated by reduced channel inventory, continue to be in the 4-6 week range

iPad in the enterprise: Qantas has deployed more than 15,000 iPads; Sweden has deployed more than 100,000

More than 13 million iPads sold for education globally

iPad's penetration in business is only 20%; Cook believes there is "substantial" room for improvement, which was the driver behind the IBM agreement

"The market is very bifurcated on iPad. In the BRIC countries, the iPad did extremely well. In the developed countries, like the U.S., the market is clearly weaker there," Cook said.

Apple's iTunes and App Store businesses

iTunes billings grew 25% year over year to reach an all-time high

Developers have now earned more than $20 billion on the App Store, nearly half in the last 12 months

iTunes software and services "almost doubling" every quarter in China

Apple's Mac business

Macs saw double-digit growth in K-12 education driven primarily by the MacBook Air

Mac sales up 39% in China year over year