Apple has reported surprisingly good third quarter results and hinted that its 10th anniversary phone line up is on schedule with the iPhone 8 expected to be launched in September at an expected price of over 1000 USD.

The third quarter ending July 1 saw iPhone sale rise 1.6% to 41.03 million units in comparison to 40. 4 million units that it sold a year ago.  In addition, iPhone sale hit the 1.2 billion mark and even Apple watch sale rose by 50 per cent.

This result also shows that iPhone buyers now maybe less inclined to defer their purchase waiting for a new product. Traditionally April-June quarter has been a low one for Apple because buyers have tended to wait for the launch of a new product in September.

For the current fourth quarter the company forecast total revenue of between USD 49 billion and USD 52 billion. According to Jan Dawson of Jackdaw Research this forecast makes it certain that some new iPhone models if not all will be released as per the schedule. But he cautions that not all iPhones may go on sale at that time nor can anyone say that there would be abundant supply of the new models but he thinks that the successors to the current models would surely be available on schedule.

But revenues were below expectations a 24.8 billion USD as a result of the lower average selling price of iPhone at 606 USD.  According to Apple CFO Luca Maestri this was mainly due to the fact that Apple had lowered the flow of inventory by 3.3 million units, mostly at the high end.

China revenue dips

While revenues from the emerging markets excluding China were up 18 per cent, sales suffered a 9.5 per cent dip in the Greater China region to USD 8 billion which was nonetheless a smaller decline when compared to recent quarters.  Apple said that this dip was concentrated in Hong Kong as both revenue and iPhone sale in mainland China remained flat even as consumers switched to domestic offerings.

Commenting on Apple’s  decision to remove  VPN apps from China App stores Apple CEO Tom Cook said,  “We would obviously rather not remove the apps, but like we do in other countries we follow the law wherever we do business,” Cook said. “We believe in engaging with governments even when we disagree. This particular case, we’re hopeful that over time the restrictions we’re seeing are lessened, because innovation really requires freedom to collaborate and communicate.”

The company’s service business that includes the App Store also jumped by 21.6 per cent and it has also increased the production of AirPods during the quarter.

Future is autonomous

Referring to Artificial Intelligence projects Cook hinted that   the company was making a big investments in autonomous systems and self self-driving cars were just a part of this overall investment.

He said, “From our point of view, autonomy is sort of the mother of all AI projects,” Cook said. “And the autonomous systems can be used in a variety of ways, and a vehicle is only one, but there are many different areas of it. And I don’t want to go any further with that.”


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