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What Impacted Apple’s iPad Revenues in Fiscal 3Q17?

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iPad revenues rose in fiscal 3Q17

Apple’s (AAPL) iPad revenues rose 2% YoY (year-over-year) to ~$5.0 billion in fiscal 3Q17, up from ~$4.9 billion in fiscal 3Q16. Apple shipped 11.4 million units in 3Q17, a 15% YoY rise in shipments compared to ~10.0 million units in fiscal 3Q16. 

iPad’s revenues rose YoY for the first time since 2013. Excluding the holiday quarter, this was also the iPad’s best quarter for revenues in the last two years.

In fiscal 2Q17, Apple’s revenues fell 12% YoY, and its shipments fell 13% YoY. The average selling price of the iPad in fiscal 3Q17 fell to $434 from $490 in fiscal 3Q16. 

The drop in ASP is due to the introduction of the 9.7-inch iPad in 2017, which is priced at $329—significantly lower than the average cost of $500 for other iPad versions.

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Over 50% of customers in China and Japan were first-time buyers

At the end of 1Q17, Apple had a market share of 24.6% in the worldwide tablet market. This figure is expected to rise as revenues rose after falling for 13 quarters. iPad revenue growth in fiscal 3Q17 was attributed to the sales of the new 12.9-inch iPad Pro. 

Apple’s CEO, Tim Cook, stated, “We achieved our highest global market share in over four years based on IDC’s latest estimate of tablet market results for the June quarter.”

According to Apple, over 50% of the customers in China (FXI) and Japan were first-time iPad buyers in the quarter ended June 30, 2017. Apple launched the 10.5-inch iPad in June 2017, and the tablet is expected to drive sales in 2017. The new iPad reportedly features the world’s most advanced display and ProMotion Technology.

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