Apple posts $37.4 bn in revenue in Q3 despite slump in iPad sales

Lower-cost phones sold there by up-and-coming rivals such as Xiaomi appeared to be grabbing market share mainly from other companies that rely on Google`s Android software.

Reuters| Last Updated: Jul 23, 2014, 11:35 AM IST

San Francisco: Apple Inc, which derives most of its business from the high-end mobile device, reported sales of $37.4 billion in its fiscal third quarter ended June.

Gross margins were better than expected at 39.4 percent, up from 36.9 percent in the year-ago quarter, primarily due to cheaper product costs and strong sales of the Mac.

But iPad sales at 13.3 million fell a little short of analysts` projections for more than 14 million. The tablet has come under increasing pressure from cheaper Android rivals.

Shares in Apple held steady at $94.72 on Nasdaq after the news.

Whether Apple can again produce a revolutionary new product, something it has not done since the iPad in 2010, remains the central question in the minds of investors and Silicon Valley executives.

Many investors expect Apple to make a play for the wearable device market with a sensor-laden smart watch, dubbed iWatch. Analysts also expect the company to introduce two versions of its smartphone this fall, including a 5.5-inch model that thrusts Apple into the market for larger-sized phones that rival Samsung helped popularize.