The iPhone 8 wait doesn’t hurt Apple sales

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Apple sold a boatload of iPhones during what tends to be the quiet quarter for the company.


Sarah Tew/CNET

Spring and summer marks a time to hit the beach, catch a baseball game and generally get outside to take advantage of the nice weather. 


Apparently, getting out includes a visit to the local Apple store too. 

Apple said Tuesday that fiscal third-quarter unit sales of its iPhone rose 2 percent, to 41 million, from a year ago, above expectations. That’s a reverse from the second quarter in which iPhone sales surprisingly slid. Apple sold $24.85 billion worth of iPhones in the period, compared with $24.05 billion a year ago. 

But hey, we’re all waiting for the iPhone 8 anyway, right?

The fiscal third quarter, which ended July 31, tends to be the sleepiest period because it’s so close to the next iPhone, which is widely expected to make its debut in early September. While some customers will upgrade to a new iPhone in the period, most savvy folks will hold off to see what Apple has up its sleeve. 

And with the event likely just a few weeks away, it’s not that long of a wait. 

The iPhone propelled Apple’s fiscal third-quarter profit of $8.72 billion, or $1.67 a share, up from a year-earlier gain of $7.8 billion, or $1.42 a share. Revenue rose 7.2 percent to $45.4 billion. 

Analysts, on average, forecast earnings of $1.57 a share on revenue of $44.9 billion, according to Yahoo Finance.  

Apple shares rose 6.5 percent $159.75 in after-hours trading, surging to an all-time high for the stock. 

Delay or not?

The only question is whether the rumored iPhone 8 — the wholly different one with the new design and all the bells and whistles — will actually show up on time. Most believe an upgraded version of the iPhone 7 will likely hit in September, but a real upgrade may face delays. 

There’s little suspense left. That’s because a river of rumors — and a leak from Apple itself — give us a pretty good picture of what the iPhone 8 looks like

Looking ahead, Apple said it expects revenue in the fiscal fourth quarter to be between $49 billion and $52 billion, which is above Wall Street’s forecast of $49.2 billion. The bullish forecast suggests Apple thinks iPhone sales will keep chugging along with no delays. 

“What matters most is how competitive and the timing for the iPhone 8,” said Patrick Moorhead, an analyst at Moor Insights. “Samsung is on its game as of late and has seen Galaxy S8 sales outpace Galaxy S7, and all eyes are on the expected Note 8.”

iPad finally rebounds

June’s Worldwide Developers Conference featured a surprising number of product announcements, including a new iPad Pro that’s sized in between the two existing professional-level tablets, and upgraded iMacs and MacBooks.

The new 10.5-inch iPad Pro injected some badly needed enthusiasm into the tablet market, where Apple suffered 13 consecutive quarters of declines in sales. 

Not this quarter. Apple saw its unit sales rise 15 percent to 11.4 million, with revenue rising 2 percent to $5 billion.

On the Mac side, the company sold 4.3 million units, up 1 percent from a year ago, as revenue rose 7 percent to $5.6 billion. 

Apple also unveiled ARKit, its platform for augmented reality, and teased its HomePod smart speaker, but those will show up later this year.

Services strong

Apple CEO Tim Cook likes to crow about the services business, which include its $10-a-month Apple Music subscription, iCloud storage, iTunes music and its cut of revenue from the App Store. Unlike the ups and downs of hardware sales, it tends to grow as more people use more Apple products.

That unit saw revenue rise 22 percent to $7.3 billion. 

And sales of its “other products,” which include the Apple Watch, AirPods, Beats headphones and other accessories, rose 23 percent to $2.7 billion. The company hasn’t broken out sales of its individual products, including the closely watched Apple Watch. 

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