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iPad sales up, Macs flat, as Apple reports on Q2 earnings

Lex Friedman | April 24, 2013
As some investors feared, Apple on Tuesday reported numbers that were worse than its performance a year ago for the second quarter--though the company still saw record sales for its March quarter.

iPad sales soared year over year: 19.5 million tablets were sold in the second quarter of 2013, compared to 11.8 million in the year-ago quarter. That's an increase of 65 percent year over year, and Apple reports that the tablet saw very strong growth in every geographic market, especially China and Japan. The company says that both the iPad and iPad mini remain extremely popular, with significantly more iPad mini sales in the second quarter than the previous quarter, which included the holiday season. The overwhelming majority of iPad mini purchasers are new to the iPad, too. And Apple says that the iPad mini is no longer supply chain-constrained.

Cook cited the iPad's performance in China in particular, where sales were up 138 percent in China during the quarter. Cook says that Apple sees a lot of opportunity in China, due to the large number of first-time smartphone buyers, including customers interested in iPhone 4. Apple's total business grew 11 percent in the Greater China region to $8.8 billion in revenue.

The Mac

Mac sales remained flat, with just under 4 million sold in the quarter, Apple reported. There was a slight drop year over year, but a minimal one; last year, Apple reported selling 4 million Macs in the quarter. Revenues per Mac were $1378, which is the highest that number has been since 2008.

Apple says it outperformed the overall PC market, which was down nearly 14 percent, per IDC estimates.

Of the Mac specifically and the PC market in general, Cook said, "I don't think this is a bad market or a dead market by any means ... We're going to continue to innovate in it. We're going to continue making the best personal computers. Our strategy is not changing." He pointed to recent Apple innovations like the Retina display in the MacBook Pro as an example of Apple's continued investment in Mac development.

iPods down, iTunes up

Demand for Apple's music players continues to shrink, with iPod sales falling from 7.6 million in the year-ago quarter to 5.6 million this year. Still, the iPod remains the dominant product in the MP3 player market, and the iPod touch makes up most of those sales, according to Apple.

The company preferred to draw attention to its digital content business in the form of the iTunes Store. Apple recorded $2.4 billion in revenue from iTunes during the quarter, a record tally. According to chief financial officer Peter Oppenheimer, Apple's online emporium of music, movies, books, and apps now tops $4 billion in quarterly billings, making it the largest digital content store in the world.

Paying dividends

Apple also announced what it calls "a significant increase" in its stock buyback and cash dividend programs. Apple says it expects to use "a total of $100 billion of cash under the expanded program by the end of calendar 2015"--representing an increase of $55 billion to the program first announced last year.


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