Apple's iPhone sales beat Street but iPad volumes slide

Mon Oct 20, 2014 5:48pm EDT
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By Christina Farr and Edwin Chan

SAN FRANCISCO (Reuters) - Apple Inc (AAPL.O: Quote) forecast a strong holiday quarter after a better-than-expected 16 percent jump in iPhone sales, and the strongest growth in Mac computer shipments in years helped the company surpass Wall Street's targets.

The company on Monday projected stronger-than-expected revenue of $63.5 billion to $66.5 billion in the December quarter, when new iPads and iPhones vie with rival devices from Microsoft Corp (MSFT.O: Quote) and Inc (AMZN.O: Quote) for consumers' holiday outlays.

Shares of Apple rose 1.3 percent to about $101.10 in after-hours trade.

But sales of the iPad, which helped launch the mainstream tablet market in 2010, slid for the third straight quarter. A gradual decline in tablet demand worldwide has worried investors already concerned with Apple's slowing growth, who are awaiting a new device that can energize its expansion.

Sales of Apple's tablet slid more than 7 percent from the previous quarter to 12.3 million units, and were down 13 percent from the year-ago period.

Some investors hope that Apple's recently forged alliance with International Business Machines Corp (IBM.N: Quote), intended to drive tablet and phone sales to corporate customers, may help reverse a decline in sales of the tablet device.

Chief Financial Officer Luca Maestri said in an interview that the pair of tech giants had already signed on 50 "foundational" or initial clients, and the two intend to introduce their first jointly designed software apps next month.

"The level of interest from the corporate world has been incredible," Maestri said.   Continued...

The leaf on the Apple symbol is tinted green at the Apple flagship store on 5th Ave in New York April 22, 2014.   REUTERS/Brendan McDermid