This afternoon, Apple announced their earnings for the third quarter of their 2017 fiscal year. Revenue grew 7% year-over-year to $45.408 billion USD for the three months ending July 1, 2017, with a gross margin of 38.5%. Operating income was $10.77 billion for the quarter, up 6.6% from a year ago. Net income was $11.31 billion, up 11.8% as well. This resulted in earnings per share of $1.67, up from $1.42 a year ago.

Apple Q3 2017 Financial Results (GAAP)
  Q3'2017 Q2'2017 Q3'2016
Revenue (in Billions USD) $45.408 $52.896 $42.358
Gross Margin (in Billions USD) $17.488 $20.591 $16.106
Operating Income (in Billions USD) $10.768 $14.097 $10.105
Net Income (in Billions USD) $8.717 $11.029 $7.796
Margins 38.5% 38.9% 38.0%
Earnings per Share (in USD) $1.67 $2.10 $1.42

Apple has been the iPhone company for pretty much a decade now, and at time, Apple has been somewhat dependant on the iPhone for most of its earnings. That’s the case again this quarter, but Apple as a company is much more diversified now than even a year or two ago when iPhone revenues could account for over 70% of their earnings. This quarter, iPhone brought in $24.85 billion in revenue, which works out to 54.7% of Apple’s revenue. iPhone revenue was up 3% year-over-year, with unit sales of 41.026 million phones, up 2% from a year ago.

Services has quickly jumped from being an afterthought at the company, to now being their number two source of revenue, surpassing both the Mac and the iPad. Services revenue jumped 22%, to $7.27 billion. The iPhone ecosystem is a strong draw for many Apple customers, clearly.

Mac sales were only up 1% year-over-year, which is a bit surprising since they hadn’t yet launched their new laptops a year ago, but revenue was up 7% to $5.59 billion, so revenue-per-device is up nicely. Apple sold 4.29 million Macs in the last three months.

iPad has been the one sore spot for Apple for several years now, with slowing sales, but earlier this year, Apple announced a new, lower cost, entry level iPad. This strategy has paid off, at least for the interim, with iPad sales up 15% in terms of units sold. Apple sold 11.42 million iPads last quarter, compared to just 9.95 million a year ago. Revenue was only up 1% though, thanks to the lower cost of these entry level devices.

Apple Q3 2017 Device Sales (thousands)
  Q3'2017 Q2'2017 Q3'2016 Seq Change Year/Year Change
iPhone 41,026 50,763 40,399 -19% +2%
iPad 11.424 8,922 9,950 +28% +15%
Mac 4,292 4,199 4,252 +2% +1%

Other Products, which includes Beats, Apple TV, Apple Watch, and accessories, also had a very strong quarter, with revenue up 23% year-over-year to $2.73 billion. Apple doesn’t break down individual sales inside of Other Products though, but Apple did say Apple Watch sales were up 50% in the quarter. Up from what, we’re not sure, but obviously a big jump regardless.

For the fourth quarter of fiscal year 2017, Apple is expecting revenue between $49 and $52 billion, with a gross margin between 37.5 and 38 percent.

Source: Apple Investor Relations

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  • duploxxx - Wednesday, August 2, 2017 - link

    enough idiots still buying that overpriced handy.
  • haukionkannel - Wednesday, August 2, 2017 - link

    Yes They do, and happily because Apple products just work for them.
    Every Apple Person I have met hate how badly Android and Windows devices work compared to Apple products and just goes back to those.
    Well some people just have enough money and most of those Apple peoples Are not even rich.
    And seing how well Apple does make Profit, there is huge amounth of those Apple peoples, so They can not be wrong.
  • jimbo2779 - Wednesday, August 2, 2017 - link

    Each platform has a lot to like and a lot to dislike. It all comes down to preference really.

    Android had tons of apps and is massively configurable. iOS is very rigid and simple but also has tons of apps and they tend to be higher quality in a lots of cases. WinMobile sits between the two but with hardly any apps in comparison.

    I regularly have to use all three; iOS is just not nice to use, Android is ok but has lots that annoys and wo seems to be great when it is working well (not really most of the time sadly) but the phones are low specved and under supported.

    There is no one size fits all, we all like different things.
  • ddriver - Wednesday, August 2, 2017 - link

    iOS is like a car you are only allowed to drive wherever apple wants you to. And all the places are more or less milking stations.

    Hardware is decent, if one abstracts away from the cost, but then again, even x86 and android are catching up in terms of preposterous pricing. Top end tablets have become shamelessly overpriced, even in the case of android, where you don't have the advantage of running real professional software. I was looking into getting a new android tablet, and the tab S3 was the logical choice, because of the stylus, but that thing is ridiculously expensive, it literally costs as much as an ipad pro, shame on samsung... I'd rather stick a little longer to the note 10, or get an x86 tablet with a stylus for less than 20% extra.

    For me android wins because most of the software I run is proprietary, and is ported to android, so I can just install what I need by simply enabling installation from "unknown sources".

    For iOS, I'd have to jailbreak and void warranty, which is not ideal. Plus it is far more expensive, which does not translate into productivity.
  • Manch - Wednesday, August 2, 2017 - link

    For a Pro tablet, Surface Pro is the way to go. Other PC manufacturers are finally bringing out similar designs but they all cheap out in some way. MS realized people will pay for a well put together device ie Apple. Pro line up has been good since 3 and became great with 4. The newest version is amazing. I looked at the tab 3 and even considered the note. Ultimately, even the low end Surface is better and I just get a nice midrange phone. Now if Intel or AMD will release a nice ATOM or ATOM equivalent and give us an upgraded Surface 3, then awesome!!
  • ddriver - Wednesday, August 2, 2017 - link

    I have one condition - that they'd make the battery easily replaceable. Which the latest surface is the furthest away from. The device is very expensive, and under heavy usage, the battery will crap out in like 2 years. Afterwards you pretty much have to throw the device away, official battery replacement is ridiculously expensive too, I think it was like 1/3 of the unit price.

    The atom is trash, heck even core m performance is abysmal, and the atom is even worse. I'd rather wait and see if amd is going to release a sub 10-watt zen cores, which sound plausible. What I really want is a powerful tablet, I don't mint if it is half an inch thick, and I don't mind if it weights a full kilogram. I'd rather take performance and battery life, sadly the fad is all about flimsy, thin and barely useful to professionals devices.
  • HStewart - Wednesday, August 2, 2017 - link

    Well on the battery, I think you going have to accept it is as fact of life. Even Samsung Galaxy Tab's don't have removal batteries.

    On Core M Cpu's, I think people got bad taste with Apple's first implementation, the latest versions are significantly faster that the earlier ones. I have both Dell XPS 13 2in1 and original Surface Pro 1 (i5) and the Dell is faster that Surface Pro 1 with i5.

    I think what you want is not a tablet but a notebook - there are many quad core i7 notebooks out there - and with Cannon Lake coming, we should have six and 8 core. Of course huge laptops with desktop chips if so desired.

    But the future is small and thin - it not a fad. But keep in mind, as time goes on technology improves. The ATOM processor is faster than Core 2 cpus and AMD processors from decade ago.
  • BillBear - Wednesday, August 2, 2017 - link

    Lacking software designed for touch, the Surface Pro isn't any kind of tablet. It's an ultrabook in a weird form factor so long as the Windows store remains a wasteland.
  • Ro_Ja - Wednesday, August 2, 2017 - link

    Exactly. Core M and Intel Atom shouldn't even exist, let alone Pentium Quad Core that is barely even fast than a Core i3 U.
  • HStewart - Wednesday, August 2, 2017 - link

    It actually depends on definition of tablet - iPad in lots of way is not a true tablet - only until it the Pro models did it support Pen - and it does not support touch.

    I was thinking of iPad Pro, and got the Samsung TabPro S - it has everything my Samsung Tab S can do and more - it can run real applications. I found the iPad Pro - just a glorified iPad ( I have a IPad Mini 2)

    I hate to say this - but is true - the iPad Pro could never do what my Samsung Tab Pro S can do. Unless you limited yourself only to Windows UAW apps.

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