iPhone Sales Boost Apple’s Resilience in Latest Quarter

Apple executives may not have mentioned advertising or marketing on the earnings call for the latest quarter that beat Wall Street’s tempered expectations, but the latest numbers reveal a growing favor for the company’s products and services among consumers and brands. The company, which is increasingly being driven by iPhone and iPad sales, reported new milestones reached with global companies on massive iOS device deployments and custom app development.

Apple posted a nearly 1 percent year-over-year gain in revenue coming in at $35.3 billion, and a 21 percent decline in profit over the same period at $6.9 billion. iPhone sales were up 17 percent from the year-ago quarter at 31.2 million while iPad sales declined 14 percent over the same period to 14.6 million.

“Companies have built tens of thousands of custom apps to improve every aspect of their business. Global companies including American Airlines, Cisco, General Electric, Roche and SAP have deployed more than 25,000 iPhones each across their organizations,” notes Peter Oppenheimer, chief financial officer at Apple. “Eli Lilly, Novartis, Cathay Life, Roche, and SAP have deployed over 20,000 iPads each across their organizations.”

Oppenheimer also says that the Los Angeles Unified School District will “begin the first phase of a massive rollout of iPads to students across the district starting this fall. The district is the second largest in the US and plans to equip every one of its 660,000 students with a tablet by 2014.”

Chief executive (CEO) Tim Cook calls enterprise a “market expansion opportunity” for Apple, adding that he thinks the company is “at the very front end of that.”

More than 900,000 iOS apps (375,000 specifically for iPad) are currently available on the App Store, following its recent five-year anniversary, and over 50 billion apps have been downloaded to date, according to Apple. Developers have been paid a cumulative $11 billion for their 70 percent cut of the action and half of that was earned in the last year, Oppenheimer says.

Apple servers are currently managing more than 320 million iCloud accounts, comments Openheimer, adding that Apple’s customers “have sent almost 900 billion iMessages, uploaded over a 125 billion photos and received over 8 trillion push notifications.”

Although the senior Apple executives did not give anything away, they did reiterate the company’s plans to introduce new products in the fall and throughout 2014. “From a growth point of view for Apple, our key catalyst always will be new products and new services. And these will be both in existing categories and new categories,” says CEO Cook.

During the question-and-answer period, Cook declined to share one analyst’s view that the upper end of the smartphone market may be oversaturated, making it more difficult to gain momentum with flagship devices going forward. “I don’t subscribe to the common view that the sort of higher end of the smartphone market is at its peak. I don’t believe that, but we’ll see and we will report our results as we go along,” he says.

Apple closed the quarter with 408 stores, 156 of which are outside the US. The company’s stores did host 84 million people during the quarter, leveling out to about 16,000 visitors per store per week. Sadly, average revenue per store was down almost 10 percent to $10.1 million.

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