Apple beats expectations with Q3 iPhone sales

Apple sold a record number of iPhones in its third quarter, but faced revenue drops across other product lines as falling device prices and increased competition bit into margins.

The company sold 31.2 million iPhones in the June quarter, up from 26 million last year. However, Apple sold just 14.6 million iPads compared to 17 million last year, and the number of Mac computers sold fell from four million to 3.8 million.

Revenue for the last quarter was US$35.3 billion with a net profit of US$6.9 billion. Last year, Apple hauled in US$35 billion for the last quarter, with a net profit of US$8.8 billion. Gross margin declined to 36.9 per cent from 42 per cent a year ago.

“We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services,” Apple chief executive Tim Cook said in a statement accompanying the financials.

While the iPhone saw a 15 per cent year-on-year increase in revenue, iPads dropped by a whopping 27 per cent, and the iPod media player line fell by 31 per cent.

Apple's iTunes and software and services division boosted year on year revenue by a quarter however, marking a bright spot in the results.

As Apple beat analysts' expections for the quarter by a whisker, shares in the company rose in after hours trading. The company expects to pay tax at a rate of 26.5 per cent.