Apple sells 48M iPhones, just below Wall Street expectations

Apple (NASDAQ: AAPL) said it sold 48.046 million iPhones during its most recent quarter, a slight improvement over the 47.534 million it sold in the previous quarter and way up from the 39.272 million it sold in the same quarter last year. Wall Street analysts had expected Apple to report sales of 48.5 million iPhones. Apple said it scored around $32 billion in revenues from its iPhone business, meaning the device accounted for 63 percent of Apple's overall revenue.

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The company's most recent quarter, which ended Sept. 26, included two days of sales of the company's newer iPhone 6s and 6s Plus phones.

"Fiscal 2015 was Apple's most successful year ever, with revenue growing 28 percent to nearly $234 billion," said Tim Cook, Apple's CEO, in a statement. "We are heading into the holidays with our strongest product lineup yet, including iPhone 6s and iPhone 6s Plus, Apple Watch with an expanded lineup of cases and bands, the new iPad Pro and the all-new Apple TV, which begins shipping this week."

Apple's stock was up slightly in after-hours trading immediately following the release of its earnings.

Importantly, Cook said he believes Apple's iPhone business still has room to grow. He said a significant number of iPhone owners are still holding onto older models and haven't yet upgraded to the company's newer, larger iPhones. He also said 30 percent of the people who purchased an iPhone during Apple's most recent quarter replaced a smartphone running Google's Android operating system, which is the largest "switcher" figure the company has recorded in the three years it has been measuring the figure. Cook added that Apple's sales in China could grow significantly, and that its sales to the enterprise could also continue to increase.

Although many investors have been concerned about Apple's exposure to a slowing Chinese economy and how that might hurt sales, the company reported that it saw a 99 percent year-over-year increase in quarterly revenue, to $12.5 billion, in the Greater China region, which includes the company's sales in China, Taiwan and Hong Kong, noted TechCrunch.

Apple said its iPhone average selling price grew by $67 year over year to $670 during the period. That growth is likely due to the more expensive iPhone 6 Plus and 6s Plus.

Apple said its overall revenues for its fiscal 2015 fourth quarter clocked in at $51.5 billion, up slightly from Wall Street expectations of around $51.04 billion, according to Business Insider. The company's earnings per share hit $1.96, above expectations of $1.88. The company's net profit reached $11.1 billion. Apple's gross margin reached 39.9 percent in the quarter, above expectations of 38.5 to 39.5 percent.

In its coming quarter, Apple said it expects to post revenues of between $75.5 billion and $77.5 billion. Wall Street had expected that number to come in at $77.13 billion, according to Business Insider. The upcoming quarter will include holiday shopping sales, and will be a key indicator of Apple's traction in smartphones and tablets. During last year's holiday quarter, Apple sold 74.5 million iPhones and scored $18 billion in net profit. BTIG forecasts that Apple will report sales of 80 million iPhones in its upcoming quarter.

During Apple's quarterly conference call with analysts, Cook briefly discussed Apple's new iPhone Upgrade Program, introduced in conjunction with the release of the company's new 6s and 6s Plus phones. Cook said the program has proven popular with customers in the United States, and that "it seems as if we're on the front end of a major trend in the industry."

Interestingly, Apple's revenue from "other products" -- which includes sales of its Apple Watch, its Beats headphones business and sales of its TV offerings -- grew 61 percent to $3.05 billion during its most recent quarter. Of the Apple Watch, Cook said that "we are in the very early innings of this promising business." And of the new Apple TV, he said the company recorded a "huge" first day of pre-order sales.

"While Apple does not report Apple Watch revenue or units, we estimate it sold 3.5 million in the quarter, generating $1.5 billion in revenue," said BTIG analyst Walter Piecyk.

In its tablet business, Apple said it shipped 9.88 million iPads in the quarter -- below Wall Street expectations of 10.2 million.

For more:
- see this Apple release
- see this WSJ article
- see this Business Insider article

Related articles:
Apple likely to best last year's iPhone sales this quarter, but all eyes are on holiday period
Apple: We sold 13M new iPhone 6s, 6s Plus models in first 3 days of sales, up from 10M last year
Apple's iPhone 6s, 6s Plus go on sale as Verizon looks to match Sprint, T-Mobile offers
T-Mobile offers iPhone 6s for as low as $5/month in device payments if customers trade in an iPhone 6

Article updated Oct. 28 with analyst commentary.