Apple posts declines in revenue and profit in Q3

Apple posted declines in quarterly revenue and profit on Tuesday. Apple said sales in the third quarter of fiscal 2006 recorded 46.85 billion dollars, down 9 percent from a year ago, while net profit fell 19 percent to 9.14 billion dollars.

Its quarterly earnings little reflected sales of iPhone 7, which has been gaining considerable global popularity after starting sales at the end of September, prompting analysts to turn more to Apple's October-December guidance.

"Fourth quarter is the most lucrative season for electronics companies trying to boost sales in the U.S. due to Thanksgiving and Christmas holidays," a source from the Korean electronics industry said. "Apple is likely to churn out drastically improved sales in the fourth quarter also due in part to Samsung's decision to end production and sales of Galaxy Note7." Tech media The Verge predicted Apple to post 78 billion dollars in sales in the fourth quarter, which is bigger than the figure of last year's when Apple sold 74.46 million iPhones and posted record sales of 74.6 billion dollars.

Apple CEO Tim Cook, during a conference call with analysts, said iPhone 7 and 7Plus are showing much better market response than expected that supply currently outweighs demand.

One less bright spot is China where Apple showed sluggishness in sales. iPhone sales fell nearly 30 percent from a year ago in the world's largest smartphone market, as China's economy slowed and local companies including Huawei, Xiaomi and Oppo upped their competition.

When asked about whether the withdrawal of Note7 from the market affected its guidance, Cook said there are a considerable number of people switching from Android to Apple. Apple Chief Financial Officer Luca Maestri also said a record number of Android users are moving to iOS.

At the company's third quarter earnings conference call on Tuesday (local time), CEO Marcello Claure of the U.S. third largest mobile carrier Sprint said that most Galaxy Note7 purchasers have changed to Galaxy S7. T-Mobile Chief Operating Officer Mike Sievert also said Monday (local time) that he's pleased to see that many people are choosing to remain Galaxy families, adding most Note7 users selected Samsung's products.

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