Notes of interest from Apple's Q3 2016 conference call
Apple's sales continue to decline across its three major platforms — Â iPhone, iPad and Mac — Â but the year-over-year losses weren't quite as bad as the market had expected. After reporting the results of its June quarter, Apple executives gave commentary and fielded questions, and notes of interest from the conversation follow.
Participating in Tuesday's conference call with analysts and members of the press were Apple Chief Executive Tim Cook and Chief Financial Officer Luca Maestri.
- Demand for iPhone SE outstripped supply throughout the quarter, prompting Apple to add capacity
- Apple saw its highest level of switchers to the iPhone ever
- iPad saw its best result in 10 quarters, with revenue up 9 percent year over year
- Apple's services business also saw 19 percent growth and will be the size of a Fortune 100 company next year
- iPhone average selling price fell $595 due to popularity of the iPhone SE. ASPs are expected to increase next quarter
- Apple finished the quarter with $231.5 billion in cash
Apple's iPhone business
iPhone SE is seeing strong sales in both established and emerging markets.
Apple added "millions" of first-time smartphone buyers in the quarter.
Active install base of iPhones is up double digits year over year.
iPhone install base has grown 34 percent year over year in China alone.
Apple did its largest channel inventory reduction in China. Cook said the results there are stronger than the numbers suggest.
Total revenue from Greater China was almost $40B in the first three quarters of this fiscal year.
iPhone sales in India were up 51 percent year on year in the same period.
Cook hyped the upcoming development accelerator for iOS in India, as well as new Maps development center.
Cook said he sees "huge potential" in India.
Apple's services business
Services grew 19 percent in the quarter, totaling $6 billion
App Store revenue was at an all-time high.
Services revenue is up over $4B year over year to $23.1 billion. Apple expects it to be the size of a Fortune 100 company next year.
Apple's iPad business
iPad saw its best result in 10 quarters
Half of iPad Pro purchases are buying for work.
Apple attributed growing revenue to the 9.7-inch iPad Pro.
iPad ASP increased to $490 thanks to iPad Pro.
Among US consumers planning to purchase a tablet in the next 6 months, 63 percent plan to buy an iPad, Maestri said. iPad Pro is the top choice for planned purchases.
Corporate buyers have a 94 percent satisfaction rate with iPad, with a 71 percent purchase intent.
Apple Watch business
Apple said it remains the best selling smart watch in the world.
Tim Cook hyped this fall's launch of watchOS 3.
Apple's Mac business
Mac is gaining a "high percentage of new customers," Maestri said.
The Mac install base ended with a new all-time high at the end of the June quarter.
Still, sales were down 11 percent to 4.3 million. Maestri cited a tough comparison from the same quarter a year ago.