Apple: Surging iPhone Sales Offset iPad Decline In Q1 - Twice

Apple: Surging iPhone Sales Offset iPad Decline In Q1

Average selling prices of iPhones also head up.
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Cupertino, Calif. — Global iPhone sale surged 46 percent in units and 57 percent in dollars to record levels in Apple’s 2015 fiscal first quarter ending December, but iPad sales fell for the fourth consecutive quarter in units and dollars, Apple reported.

The iPhone gains mark a break from the previous two fiscal years in which iPhone growth rates slowed.

The company no longer breaks out iPod sales separately, but their long decline likely continued into the quarter. Sales of iPods, which fell in fiscal 2013 and 2014, are now included in an “other products” category that fell 5 percent in revenues to $2.7 billion and includes Beats Electronics, Apple TV, and Apple-branded and third-party accessories.

For his part, Canaccord Genuity analyst Michael Walkley said the September launch of the iPhone 6 and 6 Plus is “ generating very strong replacement sales for existing iPhone consumers who slowed the pace of iPhone upgrade purchases during the relatively disappointing iPhone 5 and 5s product cycles.”

He also said he expects Apple to gain high-end smartphone market share in its fiscal 2015 because of surveys indicating a greater mix of Android smartphone consumers are switching to the iPhone 6 smartphones than they did for the iPhone 5 series. That's “primarily due to Apple entering the larger screen smartphone market segment,” he said.

First-quarter iPhone unit sales rose 46 percent to 74.5 million in units and 57 percent in dollars to $51.2 billion, indicating higher average selling prices as consumers opted for the larger screen 6 Plus and models with higher storage capacity.

Larger-screen smartphones, however, are contributing to declining tablet sales, with iPad sales off in the quarter by 18 percent in units to 21.4 million and off 22 percent in dollars to $9 billion.

Mac sales rose 14 percent in units to 5.52 million and 9 percent in dollars to $6.9 billion.

In the U.S., Apple’s consolidated sales rose 23 percent to $30.6 billion, slower than global sales growth of 30 percent to $74.6 billion. U.S. sales weren’t broken out by product category.

Net income rose 37.9 percent to $18 billion.

The first-quarter surge in iPhone sales contrasts with slowing growth rates in the previous two full fiscal years. In fiscal 2014, iPhone unit sales grew 12.6 percent to 169.2 million, and dollar sales were up 11.8 percent to $102 billion. Those growth rates were down from fiscal 2013’s unit gain of 20 percent and dollar gain of 16 percent, and 2013’s growth was down from fiscal 2012’s 73 percent unit gain and 71 percent dollar gain.

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