Apple Sees iPad Revenue Growth for the First Time in 10 Quarters

[MacRumors]

Apple today announced a year-over-year drop in revenue for the second quarter in a row based on flagging iPhone sales, but amid the decline, Apple saw its iPad revenue grow slightly for the first time in 10 quarters. Apple's iPad line brought in $4.9 billion in Q3 2016, up from $4.5 billion in the year-ago quarter.

In an interview with The Wall Street Journal, Cook said he was "encouraged" by the iPad's revenue growth and the 19 percent growth in the services category, which includes Apple Music, the App Store, iTunes, and more.

"There are a number of encouraging signs in the results," Mr. Cook told The Wall Street Journal. "This last quarter was surprising because it was better than we expected from so many different points of view, not just one thing."

While iPad revenue was up based on the higher average selling price of the 9.7 and 12.9-inch iPad Pro models, overall unit sales continued to decline. Apple sold almost 10 million iPads during the third quarter of 2016, compared to almost 11 million during the third quarter of 2015.

Apple's 9.7-inch iPad Pro starts at $599, while the 12.9-inch iPad Pro starts at $799, two price points that are much higher than the $499 price Apple's previous iPad models started at.

Article Link: Apple Sees iPad Revenue Growth for the First Time in 10 Quarters

 

[djcerla]

A very solid beat.

 

[bushido]

Nice way of spinning those numbers. if i charge more for an banana of course i am gonna see "growth"

 

[MH01]

So does this mean Apple will just put pro at the end of thier products and charge more, to compensate for declining numbers?

Outside of the USA the prices keep going up.

 

[firewood]

Nice way of spinning those numbers. if i charge more for an banana of course i am gonna see "growth"

Yes, but you can't just charge more unless you have lots and lots of customers who are ready and willing to pay significantly more. Not true for bananas in the local grocery shop.

 

[rp2011]

The 6 series is the reason for the decline, not peak iPhone . For a lot of folks , myself included it did not meet the Apple excellence criteria. This decline was first highly visible with the release of the amateurish ios7 redesign and continued with the 6 series iPhone .

The new upcoming iPhone is not what the 6 should have been because it's still just a lazy blown up iPhone without regard to the size change, but it is a huge improvement bezels notwithstanding .

The problems with sales have all been self inflicted . I'm getting this year's new iPhone because I've held out long enough and the changes are nice enough to give me a little hope that they are getting their act together. Yes I know next year is the big redesign but I'm good getting the S model of it.

 

[44267547]

My guess is the iPad Pro 12.9 outsells the 9.7 by a long shot. Seems to be the clear favorite, even though the 12.9 Pro has been available longer.
[doublepost=1469566910][/doublepost]And a 9.7 iPad Pro is overpriced. It needs to have at least a minimum of 3GB of ram.

 

[MH01]

Yes, but you can't just charge more unless you have lots and lots of customers who are ready and willing to pay significantly more. Not true for bananas in the local grocery shop.

Why? If your favourite fruit is only bananas, it's not like you have a choice, you pay the price at the time for the new banana.

 

[BSben]

Nice way of spinning those numbers. if i charge more for an banana of course i am gonna see "growth"

I wish I could be as negative as you, but it shows Mr. Cook nailed it. In countries like Germany I can see why people feel left out as lovely things like Apple Pay have not reached you yet, or the News app, or .......
If Apple would build Airports, BER would be ready now.... ;-)

 

[djcerla]

Nice way of spinning those numbers. if i charge more for an banana of course i am gonna see "growth"

That's not how economics work.

Apple has indeed raised not only revenue but ASP, in short profitability.

 

[MH01]

That's not how economics work.

Apple has indeed raised not only revenue but ASP, in short profitability.

The point is the iPad sales have continued to decline. The spin is that the increased prices have resulted in better profits, ie the raised prices are compensating for the decline in sales numbers.

So what are you going to do, keep raising prices to sustained profitability ?

The simple fact is people do not need to update tablets frequently , be it android, Apple or any other, sales numbers growth is not sustainable

 

[rp2011]

I bought my first new iPad since the iPad 2(which still works perfectly ) the reason being, the old chip can stream Netflix and Hulu and web browse like a champ, but using newer software like some of the newer photo editing and filter apps it wasn't cutting it.
So it was the arrival of more sophisticated apps appearing for the newest iPhones that made me upgrade . Developers taking advantage of the more powerful chips is what's going to move the iOS ecosystem and device sales forward . Because as a purely consumption device, the iPad 2 is still awesome.

 

[6836838]

I'm loving the positive headline spin by MR followed by negativity in the first sentence! Capitalism can never enjoy perpetual year on year growth in any industry. That pendulum will always over and under swing in any market. As a given market matures and competitors catch up, sideways movement will always ensue.

But boy do I regret not buying Apple stock in line with my 2nd generation iPod.

We are at a stage where a glass networked touch screen in various sizes has palateud and innovation can only really continue at pace in the software space. It's going to take innovation in the VR and some unknown space before we see the kind of growth experienced back in the early naughties.

Wrist wearables is not that space! Bring on HUD contacts. Oh, did I say software!?

 

[KPOM]

My guess is the iPad Pro 12.9 outsells the 9.7 by a long shot. Seems to be the clear favorite, even though the 12.9 Pro has been available longer.
[doublepost=1469566910][/doublepost]And a 9.7 iPad Pro is overpriced. It needs to have at least a minimum of 3GB of ram.

I think the 9.7 outsells the 12.9 since it is cheaper and the traditional size of an iPad. The 12.9" is bigger than some notebooks.

 

[firewood]

So what are you going to do, keep raising prices to sustained profitability ?

As long as the demand exists, in enough volume, of course. For as long as you can. In the end, everybody dies. Might as well enjoy stuff while you can.

 

[SBlue1]

In an interview with The Wall Street Journal, Cook said he was "encouraged" by the iPad's revenue growth.

Translation: "I don't care about market share anymore, all I care about is the profit margins!"

Great, we will see more and more "inflated" instead of affordable products. Maxing out the lifespan of 16 Gig modules in iPads, more glue and 128 Gig SSDs in MacBooks. Yay!

 

[44267547]

I think the 9.7 outsells the 12.9 since it is cheaper and the traditional size of an iPad. The 12.9" is bigger than some notebooks.

That's a good point. At least from a consumer point of view.

 

[MH01]

As long as the demand exists, in enough volume, of course. For as long as you can. In the end, everybody dies. Might as well enjoy stuff while you can.

Exactly. It's not like we have a choice when we are bought into the ecosystem, apple can set the price, and I have no doubt the increased prices is to combat sales number, though the danger is that people will leave

 

[djcerla]

The point is the iPad sales have continued to decline. The spin is that the increased prices have resulted in better profits, ie the raised prices are compensating for the decline in sales numbers.

So what are you going to do, keep raising prices to sustained profitability ?

The simple fact is people do not need to update tablets frequently , be it android, Apple or any other, sales numbers growth is not sustainable

Would you prefer to sell 10 bananas at $1 each or 9 bananas at $1.20?

Because that's exactly what happened to the iPad.

 

[GeneralChang]

Wrist wearables is not that space! Bring on HUD contacts. Oh, did I say software!?

Thing that is possible is not that space! Bring on the currently impossible things! Where are my currently impossible things??

In all seriousness, I think that the miniaturization that will be forced by making a compelling connected wrist wearable will translate well into the HUD contact lenses you theorized. But we're talking probably a decade of intermediary steps before we get even close to that, at the very least.

 

[MrX8503]

Nice way of spinning those numbers. if i charge more for an banana of course i am gonna see "growth"

People have a choice to not buy your more expensive banana. Just as people have a choice to not buy the more expensive iPad.

 

[jonnyb098]

Translation: "I don't care about market share anymore, all I care about is the profit margins!"

Great, we will see more and more "inflated" instead of affordable products. Maxing out the lifespan of 16 Gig modules in iPads, more glue and 128 Gig SSDs in MacBooks. Yay!

What else is there to care about other than profit margins? It sucks but Apple is a public company. Money is the game. At any cost.....sadly.

 

[SBlue1]

What else is there to care about other than profit margins? It sucks but Apple is a public company. Money is the game. At any cost.....sadly.

As a long term share holder I care about the long term game. I give a piss about short sighted quick profits generated by inflated prices. I want a strategy that will make Apple successful in the long term by making great product that people love and will buy for another decade. Those shares need to pay my daughters college.

 

[robeddie]

As a long term share holder I care about the long term game. I give a piss about short sighted quick profits generated by inflated prices. I want a strategy that will make Apple successful in the long term by making great product that people love and will buy for another decade. Those shares need to pay my daughters college.

At this point, counting on apple stock to pay for your daughters college is a bad move.

 

[SBlue1]

At this point, counting on apple stock to pay for your daughters college is a bad move.

Luckily as every good investor I diversify my investments. Will rethink holding on to the Apple stock in a few months though.