MONSTROUS iPhone sales are CANNIBALIZING iPads, gabbles Apple CEO

Vicious mobes eat their embiggened young

Apple countered soaring iPhone and Mac sales with yet another doleful quarter for the iPad in its second quarter of fiscal year 2015.

The Cupertino giant logged Q2 revenues of US$58bn (£38bn, AU$73.9bn), up 27 per cent over US$45.6bn in the same period last year. Earnings per share (non-GAAP diluted) of US$2.33 beat analyst estimates of US$2.16. Net income for the quarter [PDF] was US$13.6bn (£8.9bn, AU$17bn), up 33 per cent, year on year.

Much of those revenues came thanks to the iPhone. Apple moved 61.7 million handsets on the quarter, accounting for US$40.2bn in revenue, a 55 per cent jump in revenues, and a 40 per cent increase in units shipped, year on year. More iPhones were sold in greater China than in the US for the first time ever, apparently.

"We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever,” said CEO Tim Cook.

"We're seeing a higher rate of people switching to iPhone than we’ve experienced in previous cycles, and we’re off to an exciting start to the June quarter with the launch of Apple Watch."

iPad shipments, meanwhile, continued to slow. Apple reported moving 12.6 million iPads on the quarter, a year-over-year decline of 23 per cent. Revenue of US$5.4bn was down 29 per cent.

Cook admitted the iPad is still struggling to ward off a drop in sales from Apple's own products. "We are clearly seeing cannibalization from the iPhone and on the other side from the Mac," Cook told analysts in a conference call.

"We have never worried about that, it is what it is, and at some point it will straighten out."

The Mac continued to do well for Apple, selling 4.5 million units and bringing in US$5.6bn of revenue. That is a 2 per cent bump in sales and a 10 per cent increase in units shipped. China was particularly keen on the Mac, accounting for 31 per cent of Mac unit sales.

The App Store and iTunes remained cash cows for Apple as well, logging US$4.9bn in revenues, up 9 per cent from the same period in 2014.

The US$58bn haul is the best ever Q2 for Apple, but is well below the high-water mark Apple set last quarter when it rode strong holiday shopping season sales to generate US$74.5bn in revenues.

In the immediate future, Apple plans to take a sequential hit as the summer drags on. Its Q3 estimates call for US$46bn to US$48bn in revenues. ®

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