(MENAFN- Khaleej Times) Apple on Tuesday sent a strong message with a surprising showing in the period before the unveiling of the 10th-anniversary iPhone: it's not always all about its flagship device.
The world's most valuable company reported a record quarterly revenue for its Services unit in its fiscal third quarter, and, coupled with a revival in iPad sales, broke the mold in this three-month period, which is traditionally the company's weakest quarter.
"With revenue seven per cent up year-on-year, we're happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue," Apple CEO Tim Cook said in a statement.
And one more major announcement aimed for users in the UAE: Apple Pay is officially coming to the nation, the company announced during the conference call, which was held at 1am Dubai time on Wednesday.
The UAE will be one of four countries to have the service before year-end.
"The reach, usage and functionality of Apple Pay continue to grow," Apple said in a statement released after the call. "The UAE, Denmark, Finland and Sweden are scheduled to go live before the end of this calendar year."
It added that Apple Pay is "by far the No.1 NFC payment service on mobile devices, with nearly 90 per cent of all transactions globally."
Surprise, surprise
Apple's Services segment - which includes those from digital content, AppleCare, Apple Pay, licensing and the App Store - soared 22 per cent to $7.3 billion from a year ago.
The iPad, meanwhile, whose growth either declined or was weak for years now, surprised with a revival: sales strongly leapt unexpectedly at 15 per cent, though revenue only inched up two per cent. This could be attributed the 10.5-inch iPad Pro. which was released in June's Worldwide Developers Conference (WWDC) in California. Apple sold 11.42 million iPad units in the period, reflecting a revenue of $4.97 billion - that's almost $1 billion above expectations on Wall Street.
The iPad has been gaining traction as of late, gaining a reputation as a business product; Apple chief financial officer Luca Maestri, during the conference call, said that Walmart would be purchasing 19,000 iPads to train as many as 225,000 of its employees. He also spoke of school districts buying big numbers of iPads for its students.
Market research firm NPD Group pegs the iPad's market share at 55 per cent, which is even bigger in the 'high-end' segments.
iPhone sales were up two per cent at 41 million units, compared to 40.4 million in the same period last year and besting forecasts of 40 million, with revenue up three per cent at $24.8 billion. It was down 19 per cent and 25 per cent, respectively, from the second quarter.
Weak iPhone sales are traditionally expected at this time of the year, as Apple now regularly unveils its latest iteration in September.
Even Apple Watch sales pitched in with a robust 50 per cent increase in sales, though the company again did not delve into specifics. The Other Products category - which include the Watch, Apple TV, Beats products and third-party accessories - was also healthy, with revenue rising 23 per cent to $2.74 billion from a year earlier.
Four of five operating segments of Apple - the Americas, Europe, Japan and the rest of the Asia-Pacific - all posted revenue increases from the second quarter in 2016. China was the only region to suffer a decline.
The strong results lifted Apple shares 6.19 per cent as at Press time.
'Proud'
Cook kicked off the conference call by saying, "we're proud", then running through all the announcements made at the recent WWDC, giving emphasis to the upcoming iOS 11 and Apple's own foray into augmented reality, ARKit, expected to come with the iPhone 8.
Maestri, meanwhile, said revenue from iCloud and Apple Music were up 'strongly'. Though he gave no specifics, he did mention that paid subscriptions are now up at 185 million across the entire Services spectrum.
Apple's cash hoard is now up more than $4 billion at $261.5 billion; as at Press time, its market capitalisation is at $782.34 billion. Apple Stores now total 497 worldwide, including the recently-opened outlet at The Dubai Mall.
China, meanwhile, continues to be a challenge for Apple despite ramping up its efforts in the world's second-largest economy: revenue was down 25 per cent and 10 per cent on a quarterly and yearly basis, respectively, with the former now up at a six-quarter losing streak.
It didn't seem to bother Cook.
"We were encouraged by the results of this quarter," he said, adding that while indeed down still, Apple's performance in China has been improving.
On Apple's recent decision to remove its VPN apps from China, Cook said it was all about playing by the rules.
"We'd rather not remove them," he said. "We follow the law where we do business."
Cook also did not elaborate on autonomous cars during the call.
Apple provided a $49 billion to $52 billion revenue guidance for its fiscal fourth quarter. A cash dividend of $0.63 per share was also declared.
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