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Apple Reports Record iPhone, iPad Sales

Sales of Apple's iOS devices soared while Mac computers dropped precipitously in fourth quarter of 2012. Wall Street disappointed with the results.

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Apple reported its fiscal 2013 first quarter earnings on Wednesday. The company earned $13.1 billion in profit on $54.5 billion in revenue. In the year-ago quarter, which had 14 weeks instead of 13, Apple earned $13.1 billion on $46.3 billion in revenue.

Among the highlights were sales of Apple's iOS devices. Apple sold 47.8 million iPhones, up significantly from last year's 37 million. Sales of the iPad also jumped, from 15.4 million in last year's quarter to 22.9 million in this year's. Apple sold a total of 75 million iOS devices during the quarter. That breaks down to about 833,000 per day, or about 10 every second.

A number of new iOS devices reached the market during the fourth quarter of 2012, including the iPad Mini and the fourth-generation iPad. The iPhone 5 went on sale during the last 10 days of the third quarter, but it clearly did extremely well for Apple during the fourth quarter. Apple said its older iPhone 4S also continues to sell well because it is being offered at lower price points than the iPhone 5.

Recent reports about Apple's supply chain have suggested slowdowns in sales of the iPhone and iPad line, but Apple CEO Tim Cook shot down such reports during the company's call with analysts.

[ One new iPhone a year won't cut it if Apple wants to stay competitive in the smartphone market. Read Apple Needs More Than One iPhone To Compete. ]

"I want to take a moment and make a comment," said Cook. "I don't want to comment on any particular rumor, but I'd question the accuracy of any kind of rumor about our plans. I'd stress that even if a particular data point were factual, it would be impossible to interpret [the meaning] for our overall business. Yields can vary, supplier performance can vary, there's an inordinately long list of things that would make any single data point not a great proxy for what's going on." The reports have spooked investors in recent weeks.

As for reports about bigger iPhones, Cook quashed those, too. "Without sacrificing the one-handed ease of use, we've put a lot of thought into screen size, and we believe we've picked the right one." One-handed operation has always been an important factor in Apple's iPhone designs. Devices with screens bigger than about 4.3 inches become more difficult to use one-handed.

Apple's results also included information about its sales of Mac computers. The company sold a total of 4.1 million Macs, including laptops and desktops, during the fourth quarter. That's down 21% from last year's sales of 5.2 million. Apple blamed some of the drop on tight supplies of its iMac, which went on sale late in the fourth quarter in extremely limited quantities.

Some feel sales of Apple's iOS devices may have cannibalized sales of its Mac computers, something Steve Jobs called the "post-PC era." Cook discounted that notion.

"The other thing for us, maybe not for others, if somebody buys an iPad Mini and it's their first Apple product, we have great experience through the years, these people buy another Apple product. It's the halo effect, as we termed it, that we saw with the iPod and the Mac. We've seen some of that with the iPad as well. I see it as a huge opportunity." In other words, Cook is not worried about iPad sales eating into Mac sales.

As for iPods, sales continue their long downward trend. Apple sold 12.7 million iPods in the quarter, compared to 15.4 million in the year-ago quarter. Popularity of iPods has been in decline for some time now, as many consumers forgo dedicated media players in favor of smartphones that offer the same functionality.

Cook noted that the company's pipeline for the rest of the year is chock-full, but he didn't say anything specific about what to expect.

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Greg MacSweeney
Greg MacSweeney,
User Rank: Apprentice
1/25/2013 | 11:59:55 AM
re: Apple Reports Record iPhone, iPad Sales
we are in a post PC world, so it is not surprising that iOS devices are selling faster, while computer sales decline. Also, apps on tablets add more and more functionality everyday, allowing users to do more things on a tablet that they used to do on a computer. Wall St didn't like the results, but going long on apple is probably a good bet at this point.
Melanie Rodier
Melanie Rodier,
User Rank: Apprentice
1/24/2013 | 10:12:02 PM
re: Apple Reports Record iPhone, iPad Sales
There are a lot of people who only use their computers to surf the internet and send emails, so I would think that they might want to invest in an iPad which is much cheaper than a Mac - if they want to buy Apple products that is. Although given the decline in PC sales I wouldn't be surprised if iPads and other tablets eventually replace the PC too for a large number of people.
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