Apple’s iPhone’s sales soared 51 percent in the third quarter after U.S. shipments, elating its stock five percent even as revenue chop down.
On Tuesday, Apple reported that their revenue is 22 percent short as gross margins decrease from 42 percent last year to below 37 percent.
Apple shows undisturbed even when the growing rivalry is affecting demands for their top-selling products negatively. Competitor Samsung Electronics Co, Ltd. ignited those fears when it released substandard earnings early this month.
Apple's stock, which has plummeted 20 percent since January, climbed five percent to $437.94 in after-hours trade. It closed at $418.99 on Nasdaq.
Sharon Cross of Cross Research said in Reuters, “The iPhone number should provide some comfort to investors who were worried about smartphone demand. That's one of the reasons the stock is up. Expectations were not strong for this quarter.”
The company’s sales are far greater than the estimated 26 million iPhones and 14.6 million iPads. It sold 31.2 million iPhones last quarter.
“iPhone sales rose 51 percent in the United States from a year earlier, and 66 percent in Japan,” according to Peter Oppenheimer, Apple’s Chief Financial Officer.
But profits from greater China, a very crucial market for the Silicon Valley giant as it struggles for growth, dropped 43 percent from the second quarter and 14 percent from the year-ago period.
Executives blamed China's sluggish economy for the income decline but did not elaborate.
"China is a huge opportunity for Apple. I don’t get discouraged over a 90-day kind of cycle," Chief Executive Tim Cook said on a conference call.
On the other hand, Investors' major concern is if Apple has lost its innovative edge after re-inventing at least three major consumer electronics markets.
“Expect new products in coming months with some ‘in new categories’’’, said cook while not divulging too much.
"We are on track to have a very busy fall," CFO Oppenheimer claimed.
"It's pretty remarkable that they are selling as many phones as they are, given that it's not a new product. That's really the key for them; they've got to come up with a new product." said Michael Yoshikami, chief executive of Destination Wealth, which owns Apple shares.