Apple Q3 Earnings

Apple delivered a relatively boring June quarter earnings report.

The numbers were all pretty much in line and the stock barely moved on the news.

Revenue of $37.43 billion was slightly lighter than expected, but EPS of $1.28 was ahead of expectations (full numbers are below).

If there's a story to be told from this earnings report it's that the iPad in the U.S. is surprisingly weak.

Apple sold 13.3 million iPads, down 9% an a year-over-year basis, and lighter than the 13.8 million analysts expected.

On the earnings call, CEO Tim Cook said the iPad "met our expectations, but not yours."

During the Q&A with analysts, he dug in further on the iPad. He said the market is "bifurcated" with the developing markets delivering strong growth. In the BRIC countries, "iPad did well," said Cook. In China, growth was over 50%. In the Mid-East, it was over 60%. But in the U.S., Cook said, "the market is weaker there."

He continues to believe the iPad business can grow. He said that if you look at projections from third party firms, the tablet market should be bigger than the PC market next year. He says that Apple's new partnership with IBM should deliver a shot in the arm and boost iPad sales.

If you're looking for a positive with the iPad, it's this: Apple says 50% of people buying iPads are new to the iPad. This suggests the market has room to grow. Further, Cook said the iPad Mini has 100% customer satisfaction.

The market once again shrugged at the weak iPad number because the iPhone was solid.

Apple sold 35.2 million iPhones, up 13% on a year-over-year basis, and right around analyst expectations of 35.3 million units sold for the quarter.

On the earnings call, Cook said iPhone sales were strong across its three product tiers. It sells an entry level iPhone 4S, a mid-tier iPhone 5C, and high-end iPhone 5S. Cook said growth of the 5C was stronger this year than the iPhone 4S, which was the comparable phone in the line up last year.

China was really strong for Apple. On the call, Cook said iPhone units were up 48%. He also said that Mac sales were up 39% in China.

This runs contrary to what many people expected. As competition from Android increases in China, people thought Apple would weaken. Instead, it's doing very well. Speaking with Reuters, CFO Luca Maestri, said that Xiaomi, the Android phone maker that's making waves, is not taking share from Apple, but rather it's taking share from other Android phone makers.

Overall, it was another strong quarter from Apple.

Here are the numbers. All expectation numbers come via Bloomberg: