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Apple CEO sees more opportunity on top of $58B Q2 sales

Posted: 29 Apr 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Apple? iPad? iPhone? Samsung? revenue?

"We continue to see a higher rate of [Android] switchers [to the iPhone] than we have seen in previous cycles, and we see a reasonable percentage of first time buyers particularly in emerging markets," Cook added, noting Apple reported a 58 per cent total sales increase in emerging markets with iPhone sales strong in countries including Mexico, Turkey and Singapore.

Apple's chief rival, Samsung, started shipping its next generation Android phone, the Galaxy S6, after Apple closed its books on its Q2.

So far, Apple is only selling its new smart watch online as it ramps up supply. Demand is "difficult to gauge when you don't have products in stores," he said, giving few details about sales.

Analysts noted Cook used fewer superlatives describing the smart watch launch than in prior new product introductions. They also expressed surprise the product had below average margins for Apple products given its base $349 price and luxury models costing thousands of dollars.

"We are not guiding to what gross margins [for the watch] will be over time, just what it is right now," Cook noted.

As for the iPad, Cook noted it has suffered from cannibalisation from larger iPhones and slimmer Mac notebooks. "The iPad is a good business for the long term, when precisely it starts to grow again I'm not sure, but I strongly believe it will," he said.

Cook was especially bullish on greater China which bought 70 per cent more Apple products compared to 2Q14. Apple recorded 70 per cent growth in iPhone sales in the region that could translate to 9 per cent in higher market share there, Cook estimated.

Mac sales were up 31 per cent in greater China at a time when IDC said PC sales contracted there by 3 per cent, Cook said. In the People's Republic of China, the otherwise falling iPad "had its best quarter ever and grew in a contracting market, everything in China was extremely good," he said.

- Rick Merritt
??EE Times

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