Follow Us

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

Five takeaways from the Apple earnings call

Apple's doing great in China, not so well in tablets, and R&D spending is increasing

Article comments

Apple reported its quarterly numbers on Tuesday, a mixed bag that saw profits rise up but sales fall short of the mark. Here are five takeaways from the earnings call that followed.

Apple's pouring more money into R&D

Apple has spent US$3.3 billion in the past nine months on research and development. That's 3.1 percent of revenue, putting it on course to beat its R&D spending for the past several years. The last time spending reached that level was 2009, and it could still go higher yet. In the April-to-June quarter, R&D spending was 4.3 percent of revenue, a level not reached since before the iPhone launch. What's driving the spending? Only Apple knows, but a good guess would be the iPhone, which will reportedly soon see a major overhaul, and Apple's much-rumored wearable. It's worth noting, however, that Apple's R&D spending is lower as a percentage of revenue than many of Silicon Valley's big enterprise tech firms.

Forget sales, iPad users are happy, and Apple says that's what counts

At 13.3 million units, iPad sales were down more than a million from the same period last year. Tim Cook said that's what he was expecting, but he acknowledged it caught most everyone else by surprise. What he's more focused on, he said, are surveys showing how happy people are with their iPads. If only happiness could pay the bills. He did hint that while sales might be declining, Apple has got more tricks up its sleeve. "We still feel the category is in its early days and there is significant innovation we could bring to the iPad." Of course, he didn't say what it might be.

Apple is killing it in China

Even Cook admitted that Apple's performance in China was "surprising." Sales there were $5.9 billion, just a couple of billion dollars off Apple's total sales for all of Europe. "We thought it would be strong, but it went past what we thought," he said. Thanks in large part to a new deal with China Mobile, iPhone sales in China jumped 48 percent, Macintosh computer sales were up 39 percent and even iPad sales rose.

The IBM deal explained

When Apple announced a big deal with IBM last week to get iPads and iPhones into corporations, some scratched their heads. On Tuesday, Cook explained it's all about ramping up tablet sales to businesses as PC sales decline. Apple's tablet market share among businesses is about 20 percent -- way lower than it enjoys in other markets. "I think our theory since the first time we shipped iPad was that the tablet market will eventually surpass the PC market. That theory is still intact. I just think we have to do some things to get the business market moving at a faster trajectory," he said.

We still don't know when the iPhone 6 or the 'iWatch' will launch

If you were expecting even a hint about that, you really don't know Apple. A couple of analysts tried to tease out some information about what's coming and when, but Cook would only say that "new products and services" are on the way. Some things never change.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com



Share:

More from Techworld

More relevant IT news

Comments



Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

Techworld White Papers

Choose – and Choose Wisely – the Right MSP for Your SMB

End users need a technology partner that provides transparency, enables productivity, delivers...

Download Whitepaper

10 Effective Habits of Indispensable IT Departments

It’s no secret that responsibilities are growing while budgets continue to shrink. Download this...

Download Whitepaper

Gartner Magic Quadrant for Enterprise Information Archiving

Enterprise information archiving is contributing to organisational needs for e-discovery and...

Download Whitepaper

Advancing the state of virtualised backups

Dell Software’s vRanger is a veteran of the virtualisation specific backup market. It was the...

Download Whitepaper

Techworld UK - Technology - Business

Innovation, productivity, agility and profit

Watch this on demand webinar which explores IT innovation, managed print services and business agility.

Techworld Mobile Site

Access Techworld's content on the move

Get the latest news, product reviews and downloads on your mobile device with Techworld's mobile site.

Find out more...

From Wow to How : Making mobile and cloud work for you

On demand Biztech Briefing - Learn how to effectively deliver mobile work styles and cloud services together.

Watch now...
* *