iPad sales stabilize in Apple's fiscal 2016 third quarter

— 4:15 PM on July 26, 2016

After last quarter's iPhone sales appeared to reach a peak, Apple watchers were curious to see what the company's performance in the following quarter would look like, and now we know. The company released its results for the third quarter of its fiscal 2016 today. Apple raked in $42.4 billion in revenue, down 15% from a year ago, and it made $7.8 billion in net income, down 27% from a year ago.

iPhone sales declined less on a year-on-year basis than they did last quarter. Apple sold 40.4 million of its handsets, down 15% from a year ago. iPad sales appear to be stabilizing, however—though unit shipments were down 9% from a year ago, revenue from the slates was up 7% at $4.8 billion. Apple CEO Tim Cook says that result is thanks to the introduction of the 9.7" iPad Pro, and it breaks a trend of double-digit sales declines for the product family. Mac unit sales shrank 11%, however, producing revenue of $5.2 billion. That figure is a 13% decline from this time a year ago.

Even if its hardware isn't producing the same skyrocketing growth it once was, Apple's services business is on a tear. That part of the company took in $6 billion in revenue, up 19% from a year ago. The "Other Products" category, which partially comprises the company's sales of the Apple TV, Apple Watch, Beats gear, the iPod, and accessories, didn't have as good a result—its $2.2 billion in revenue is down 16% from a year ago. Cook says the Apple Watch remains the best-selling smartwatch in the world, however, and he cites high customer satisfaction ratings and watchOS 3 as reasons to be optimistic about the product.

For its fiscal fourth quarter, Apple expects revenue between $45.5 billion and $47.5 billion and a gross margin between 37.5 and 38 percent.

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