Today Apple released their earnings for Q3 of fiscal year 2015, which ended June 27th. In what seems to be a never-ending sequence of records, once again, Apple posted a record third quarter. Revenue for the quarter came in at $49.6 billion, up 33% from a year ago. Gross margin was $19.7 billion, also up 33% from Q3 2014. Operating income was up almost 37% to $14.1 billion, and net income was $10.7 billion for the quarter, a gain of 37.8% year-over-year. Earnings per share was $1.85, up from $1.28 in Q3 2014.

Apple Q3 2015 Financial Results (GAAP)
  Q3'2015 Q2'2015 Q3'2014
Revenue (in Billions USD) $49.605 >$58.010 $37.432
Gross Margin (in Billions USD) $19.681 $23.656 $14.735
Operating Income (in Billions USD) $14.083 $18.278 $10.282
Net Income (in Billions USD) $10.677 $13.569 $7.748
Margins 39.7% 40.8% 39.4%
Earnings per Share (in USD) $1.85 $2.33 $1.28

Apple’s iPhone business has been the primary factor in these record breaking quarters, and the iPhone 6 and 6+ sales continued to be strong. For the quarter, Apple sold 47.5 million iPhones, which is a gain of 35% in units. Even more impressive is that these 35% more units resulted in 59% more revenue, with iPhone sales totalling $31.4 billion for this quarter alone.

Mac sales have also been strong, and while Apple has generally outpaced the PC market in sales growth for a while, Apple saw an additional 5% in Mac unit sales for Q4 compared to Q3, and 9% from a year ago. This is at a time where the rest of the PC market is contracting, so Mac sales were an impressive 4.8 million units, with revenue of just over $6 billion for the quarter. The resurgence of the Mac has been quite the rise, with Mac revenue being eclipsed quite a bit by the iPad not very long ago. Times have changed though and Apple’s PC business is currently the only one that has seen an increase in sales according to the reports floated around in the last couple of weeks.

iPad sales though are not so rosy. The iPad sales were very strong, and while sales are not exactly terrible, the number of units being sold has been dropping for some time. Much debate has been about why this is, but certainly owners of the iPad have not felt the need to refresh their devices anywhere nearly as quickly as phones. For the quarter, there were 10.9 million iPads sold, which resulted in revenue of $4.5 billion. The number of units sold is down 13% from Q2, and down 18% year-over year.

Apple Q4 2014 Device Sales (thousands)
  Q3'2015 Q2'2015 Q3'2014 Seq Change Year/Year Change
iPhone 47,534 61,170 35,203 -22% +59%
iPad 10,931 12,623 13,276 -13% -18%
Mac 4,796 4,563 4,413 +5% +9%

Services, which include iTunes sales, AppleCare, Apple Pay, and will include Apple Music in the future, saw a nice jump as well with just over $5 billion in revenue for the quarter. This is up 1% from last quarter, and up 12% from last year.

“Other Products” which is Apple TV, Apple Watch, Beats, iPods, and accessories had a big quarter, and while individual numbers were not announced, it is likely due to initial sales of the Apple Watch which came out in the quarter. For Q3, this group had sales of $2.6 billion, up 56% from last quarter and up 49% year-over-year. Likely most of the increase can be attributed to the Watch, but without knowing average selling price, it would be pretty difficult to try and extrapolate unit sales without more information.

Apple Q2 2015 Revenue by Product (billions)
  Q3'2015 Q2'2015 Q3'2014 Revenue for current quarter
iPhone $31.368 $40.282 $19.751 63.2%
iPad $4.538 $5.428 $5.889 9.1%
Mac $6.030 $5.615 $5.540 12.2%
iTunes/Software/Services $5.028 $4.996 $4.485 10.1%
Other Products $2.641 $1.689 $1.767 5.3%

This pipeline post is quite a bit shorter than the Microsoft earnings, but for all of the right reasons. There is less to say when things are going as well as they are for Apple right now. iPhone sales are still a huge part of their balance sheet, and seem to have no sign of slowing down. People obviously wanted a larger iPhone and sales have skyrocketed since the iPhone 6 and 6+ were launched. But I think we were all expecting this based on past performance. I think what is most interesting is how much of the PC market Apple has managed to chip away with Mac sales, which are up an amazing 9% when the rest of the market contracted.

For Q4, Apple is expecting revenue of $49 to $51 billion, with a gross margin of 38.5 to 39.5%.

Source: Apple Investor Relations

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  • FunBunny2 - Wednesday, July 22, 2015 - link

    -- It's not like there's nothing left to invent.

    Depends on what you mean by invent. Most of what exists today in the consumer space is stuff that was figured out decades ago. Compared to when Bell Labs was started, the picture of the physical world is 99.99% painted.
  • q_ex - Wednesday, July 22, 2015 - link

    Eerily familiar... E.g., Lord Kelvin circa 1900 "There is nothing new to be discovered in physics now. All that remains is more and more precise measurement." There's some dispute as to the accuracy of the quote but the sentiment was certainly common during that period in Physics, just before relativity and QM took shape. So far at least, every time we think we're close to figuring out everything, mother nature offers up a pleasant surprise.... and that's what keeps us researchers in business :)
  • FunBunny2 - Wednesday, July 22, 2015 - link

    -- Eerily familiar...

    The difference between 1900 and 2015: we know just about all that can be known about the physical universe. Once you have the periodic table, relativity, QM, the Bohr model, you've eliminated vectors of uncertainty within the knowledge space. That last bit is the point. Yes, we might be able to make 7nm semi-conductor devices, but that's just engineering, not physics.
  • p1esk - Wednesday, July 22, 2015 - link

    Let's see, just in physics: we still don't have a grand unified theory of how things work. We still don't know how QM and gravity are connected. We still don't know much about the dark matter - you know, the stuff that potentially accounts for 90% of the Universe? Quantum computing? Cold fusion? Room temperature superconductors? Yeah, looks like we have nothing left to do...
  • FunBunny2 - Wednesday, July 22, 2015 - link

    -- Yeah, looks like we have nothing left to do...

    Nor will they, since we know the laws of physics, which we've proved, mean they can't be done. Even if there is a unified theory, the likelihood that it would lead to consumer products is nil.

    Dark matter and dark energy are MacGuffins.
  • p1esk - Wednesday, July 22, 2015 - link

    Lol, I'm glad you have it all figured out. I guess our best physicists didn't get the memo...
  • Michael Bay - Thursday, July 23, 2015 - link

    Stop listening to Tyson.
  • FunBunny2 - Thursday, July 23, 2015 - link

    -- Stop listening to Tyson.

    Yeah, he's just an affirmative action physicist? Right?? Mod: that's sarcasm, if you're too dumb to see it.
  • Michael Bay - Friday, July 24, 2015 - link

    He`s an administrator _at best_. Your failure to see something so trivial is rather funny, hence grasping at straws with his race, which has exactly nothing to do with it.
  • FunBunny2 - Tuesday, July 28, 2015 - link

    -- He`s an administrator _at best_.

    So, not only is he AA (and got promoted to Admin to make the numbers look better), but managed to so mis-understand astrophysics that he's to be ignored?????

    Sagan was his mentor and idol. Ignore him, too?

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