Apple Sees iPad Revenue Growth for the First Time in 10 Quarters

Tuesday July 26, 2016 1:49 PM PDT by Juli Clover
Apple today announced a year-over-year drop in revenue for the second quarter in a row based on flagging iPhone sales, but amid the decline, Apple saw its iPad revenue grow slightly for the first time in 10 quarters. Apple's iPad line brought in $4.9 billion in Q3 2016, up from $4.5 billion in the year-ago quarter.

In an interview with The Wall Street Journal, Cook said he was "encouraged" by the iPad's revenue growth and the 19 percent growth in the services category, which includes Apple Music, the App Store, iTunes, and more.

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"There are a number of encouraging signs in the results," Mr. Cook told The Wall Street Journal. "This last quarter was surprising because it was better than we expected from so many different points of view, not just one thing."
While iPad revenue was up based on the higher average selling price of the 9.7 and 12.9-inch iPad Pro models, overall unit sales continued to decline. Apple sold almost 10 million iPads during the third quarter of 2016, compared to almost 11 million during the third quarter of 2015.

Apple's 9.7-inch iPad Pro starts at $599, while the 12.9-inch iPad Pro starts at $799, two price points that are much higher than the $499 price Apple's previous iPad models started at.

Related Roundups: iPad Pro, iPad mini 4 (2015), iPad
Buyer's Guide: 10.5" iPad Pro (Don't Buy), iPad Mini (Don't Buy), 12.9" iPad Pro (Caution), iPad (Neutral)
44 comments


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bushido
27 months ago
Nice way of spinning those numbers. if i charge more for an banana of course i am gonna see "growth"
Rating: 18 Votes
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MH01
27 months ago

That's not how economics work.

Apple has indeed raised not only revenue but ASP, in short profitability.


The point is the iPad sales have continued to decline. The spin is that the increased prices have resulted in better profits, ie the raised prices are compensating for the decline in sales numbers.

So what are you going to do, keep raising prices to sustained profitability ?

The simple fact is people do not need to update tablets frequently , be it android, Apple or any other, sales numbers growth is not sustainable
Rating: 7 Votes
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SBlue1
27 months ago

In an interview with The Wall Street Journal ('http://www.wsj.com/articles/apple-earnings-fall-on-iphone-slump-1469565018'), Cook said he was "encouraged" by the iPad's revenue growth.


Translation: "I don't care about market share anymore, all I care about is the profit margins!"

Great, we will see more and more "inflated" instead of affordable products. Maxing out the lifespan of 16 Gig modules in iPads, more glue and 128 Gig SSDs in MacBooks. Yay! :(
Rating: 7 Votes
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MH01
27 months ago

Yes, but you can't just charge more unless you have lots and lots of customers who are ready and willing to pay significantly more. Not true for bananas in the local grocery shop.


Why? If your favourite fruit is only bananas, it's not like you have a choice, you pay the price at the time for the new banana.
Rating: 5 Votes
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firewood
27 months ago

Nice way of spinning those numbers. if i charge more for an banana of course i am gonna see "growth"


Yes, but you can't just charge more unless you have lots and lots of customers who are ready and willing to pay significantly more. Not true for bananas in the local grocery shop.
Rating: 4 Votes
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robeddie
27 months ago

As a long term share holder I care about the long term game. I give a piss about short sighted quick profits generated by inflated prices. I want a strategy that will make Apple successful in the long term by making great product that people love and will buy for another decade. Those shares need to pay my daughters college. :)


At this point, counting on apple stock to pay for your daughters college is a bad move.
Rating: 3 Votes
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Relentless Power
27 months ago
My guess is the iPad Pro 12.9 outsells the 9.7 by a long shot. Seems to be the clear favorite, even though the 12.9 Pro has been available longer.
[doublepost=1469566910][/doublepost]And a 9.7 iPad Pro is overpriced. It needs to have at least a minimum of 3GB of ram.
Rating: 3 Votes
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MH01
27 months ago
So does this mean Apple will just put pro at the end of thier products and charge more, to compensate for declining numbers?

Outside of the USA the prices keep going up.
Rating: 2 Votes
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SBlue1
27 months ago

What else is there to care about other than profit margins? It sucks but Apple is a public company. Money is the game. At any cost.....sadly.


As a long term share holder I care about the long term game. I give a piss about short sighted quick profits generated by inflated prices. I want a strategy that will make Apple successful in the long term by making great product that people love and will buy for another decade. Those shares need to pay my daughters college. :)
Rating: 2 Votes
Avatar
SBlue1
27 months ago

At this point, counting on apple stock to pay for your daughters college is a bad move.


Luckily as every good investor I diversify my investments. :) Will rethink holding on to the Apple stock in a few months though.
Rating: 2 Votes
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