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Apple Had Another Strong Quarter, But The iPad Didn’t

Apple’s fourth quarter earnings report is another huge win for the iPhone. The iPad? Well…

Apple Had Another Strong Quarter, But The iPad Didn’t

Apple just had another completely insane financial quarter. The company reported its fourth quarter earnings this afternoon and as expected, it sold an extraordinary number of iPhones and raked in a ton of cash doing it. While its tablet business continues to shrink–and the Apple Watch is still a fledgling part of Apple’s profits–the success of its smartphone division keeps exploding.

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All told, Apple pulled in $42.1 billion in revenue last quarter, a 22% increase over the same quarter last year. Of that, $11.1 billion was marked down as profit. The company’s quarterly profits rose 31% over last year, thanks in large part to growth in iPhone sales in China.

Last quarter, Apple started shipping the iPhone 6s and 6s Plus, both relatively minor updates to last year’s redesigned iPhone 6 and 6 Plus. Apple shipped over 48 million iPhones last quarter, a 22% increase over last year. This is impressive–by comparison, last year’s launch of the iPhone 6 and 6 Plus fueled a 15% surge in sales during the fourth quarter of 2014.

Notably, the amount of revenue raked in by the iPhone grew by 36% to more than $32 billion, compared to 22% growth in units shipped. Evidently, Apple’s more expensive smartphone models (like the iPhone 6 Plus and 6s Plus, as well as larger capacity models) have been doing well.

Despite its early success, sales of the iPad continue to shrink. Last quarter, the iPad saw its lowest sales since late 2011, when the tablet was still relatively new. Apple shipped only 9.8 million iPads last quarter, which is a 20% decline from the same period last year.

The iPad has seen its sales dip year-over-year for the last seven straight quarters, with only iterative feature updates made along the way. In the second quarter of this year, Apple sold 12.62 million iPads, a 22% drop from the year prior. In Q3 the iPad dropped even further to 10.9 million units shipped, another year-over-year decline.

Given this recent history, today’s iPad numbers are a shock to no one. Well aware of their tablet’s sagging growth, Apple announced the larger, more productivity-focused iPad Pro last month. The iPad Pro starts shipping next month, just in time for the holiday shopping season. So if we’re going to see any change in the iPad’s fortunes, it will likely be in the company’s next earnings report.

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Apple CEO Tim Cook remains quiet on the success (or lack thereof) of the Apple Watch, which started shipping in April. In Apple’s earnings report, the Apple Watch is lumped into the “Other” category of products along with the iPod and Apple TV, so we don’t get to see how those individual products are performing. On today’s earnings call, Cook declined to offer any insight into how many watches the company has sold, saying only that Apple is “in very early innings of this promising new part of our business.”

But for now, it’s all about the iPhone.

Related: History of Apple in Under 3 Minutes

About the author

John Paul Titlow is a writer at Fast Company focused on music and technology, among other things.

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