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Apple Cites Strong iPad Pro Sales For Work, But Partners Lament Sluggish Pace of Mac Refreshes

Apple's fiscal third quarter saw big drops in sales for iPhones and Macs but higher revenue for iPads.

Apple experienced a ’very difficult’ fiscal third quarter for Mac sales, but reported growing adoption of the iPad for business use during the period, Apple executives said during the company’s earnings call Tuesday.

The focus of the quarterly earnings announcement was, unsurprisingly, on Apple’s massive iPhone business, which declined to $24.04 billion during the fiscal 2016 third quarter, ended June 25. That was down 23.4 percent compared to the same period a year earlier when iPhone sales reached $31.37 billion.

[Related: Apple And The Channel: Tekserve CEO On The Changing Relationship Between Apple And Partners]

Of more concern to some Apple partners is what Apple has been doing outside of the iPhone - or rather, what Apple hasn’t been doing. The MacBook Pro hasn’t seen a refresh in more than a year while the Mac Pro, popular for video production and other graphics-intensive professions, hasn’t been updated in more than two years.

’I understand the iPhone is a huge part of their total piece of the pie. I totally get that - that actual Macs are not as big of a piece of the circle,’ said Jerry Zigmont, owner of MacWorks LLC, an Apple consultant based in Madison, Conn. ’But what we see is, people need Macs and they need iOS devices. It’s not one or the other.’

Mac sales were $5.25 billion during the fiscal third quarter, down 12.9 percent from $6.03 billion in the same period of 2015. Mac units shipped during the quarter were down to 4.3 million from 4.8 million a year earlier. During the earnings call, Apple CFO Luca Maestri said the company’s fiscal third quarter was ’very difficult compared to the year-ago quarter’ for Mac sales, pointing to a slowdown in sales for the global PC market overall.

But Apple partners told CRN that they believe the tech giant could be doing more to encourage sales for its Mac product lines.

’One of our clients is an architectural firm that uses a lot of Mac Pros - that’s a product line that’s getting kind of long in the tooth,’ said Michael Oh, CTO of TSP LLC, a Cambridge, Mass.-based Apple partner.

’So certainly there are some opportunities for Apple to release some new products, and get some sales," Oh said - both from businesses that would want a Mac Pro or "cutting-edge" users who want the latest hardware as part of their laptops.


Oh said he expects Apple may have plans this fall for "a pretty big release across the board on Mac hardware, at least - which is what we care about.’

Likewise, Zigmont, of MacWorks LLC, said his firm has ’a lot of clients in a position where they need a new (Mac) computer. And our advice has been, 'hold off.'’

’There’s just a crying need for new Apple hardware,’ he said.

One exception has been the MacBook, which Apple updated in April, about a year after introducing the ultra-portable laptop - though that device is generally less of a draw for business users compared to the more-powerful MacBook Pro.

’The phones come out regularly … but they’re ignoring the rest of their product line,’ Zigmont said.

While Apple CEO Tim Cook did not mention the Mac during his prepared comments for the earnings call, he did discuss the iPad, which generated revenue of $4.88 billion in Apple’s fiscal third quarter - up 7.4 percent from $4.54 billion in the same quarter of 2015.

Cook said during the earnings call that sales growth in the iPad line was driven by the release of the 9.7-inch iPad Pro in March. Cook also disclosed Apple survey results showing that half of iPad Pro purchases have been for work usage.

Overall, Cupertino, Calif.-based Apple reported sales of $42.36 billion for its fiscal 2016 third quarter, down 14.6 percent from sales of $49.60 billion in the same quarter a year ago.

Apple’s net income for the quarter was $7.8 billion, down 27 percent from net income of $10.68 billion in the year-ago quarter. Earnings per share were $1.42 in the quarter compared to $1.85 one year earlier.

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