After the close on Monday, Apple Inc. (NASDAQ:AAPL) reported earnings which disappointed many investors. Shares dropped over 8% in after hours trading, and the conference call with Apple Inc. (NASDAQ:AAPL) management did little to calm investors.  Peter Oppenheimer Apple Inc. (NASDAQ:AAPL) Computer, Inc. – CFO was on that call with Apple investors. He had some interesting comments about the iPhone and iPad, which can be found below.

Apple Inc. AAPL Earnings
Apple (AAPL) Earnings

Peter Oppenheimer Apple Inc. (NASDAQ:AAPL) Computer, Inc. – CFO

As for the details of the quarter I’d like to begin with iPhone. Despite supply constraints on iPhone 5S, we sold 51 million iPhones compared to 47.8 million in the year ago quarter. That’s an increase of over $3 million or 7%, and a new quarterly record. IPhone sales growth was very strong year-over-year in Japan thanks to the addition of NTT DoCoMo in September and our continued partnership with Softech and KDDI. In fact, based on the latest published by Kantar, iPhone accounts were 69% share of the smartphone market in Japan.

We also generated strong year-over-year iPhone growth in greater China, Latin America, the Middle East and Russia. In the US market Apple Inc. (NASDAQ:AAPL) remains the leading smartphone manufacturer with iPhone accounting for 41% of smartphone subscribers in the three-month period ending in November according to comScore. We are very pleased to have reached a multi year agreement with China Mobile, the largest network in the world with over 750 million customers, and to be selling iPhones through their expansive network of stores beginning on January 17. China is incredibly important market to Apple Inc. (NASDAQ:AAPL) and iOS devices already account for 57% of all mobile web browsing in China.

IPhone customers are loving their phones and continue to the highest loyalty rate in the industry. A December survey of US customers by ChangeWave indicated a 96% customer satisfaction rate for iPhone, and based on the latest data provided by Kantar, iPhone customers have a 90% loyalty rate, significantly higher than the competition. We exited the quarter with about 15.3 million total iPhones in channel inventory, which represented a sequential increase of less than 1 million units from the September quarter and left us within our target range of 4 to 6 weeks of iPhone channel inventory.

Apple Inc. (NASDAQ:AAPL) iOS 7

The release of new iPhones with iOS 7 introduced powerful security and management features for business and enterprise customers. And iOS 7 has received FIPS 140-2 certification from the US Federal Government.

These features, coupled with ease of developing customer enterprise apps, continue to make iPhone the device of choice for large organizations. Many companies including Accenture, Cisco and American Airlines have tens of thousands of employees using iPhones for work. In fact, some, including Deloitte and GE, have over 50,000 iPhones each on their networks around the world. And based on the latest data published by IDC, combining business, government and education institutions, iPhone has a 59% share of the US commercial smartphone market.

Apple Inc. (NASDAQ:AAPL) iPAD

Turning to iPad, despite supply constraints we sold over 26 million iPads during the quarter compared to 22.9 million in the year ago quarter. That’s an increase of over 3 million iPads or 14%, and represents a new all-time quarterly sales record. Apple Inc. (NASDAQ:AAPL) IPad sales were very robust in mainland China where sales more than doubled year-over-year. We also experienced strong iPad sales growth in the Middle East, Latin America, Russia, and parts of Western Europe.

 

Customers are loving the new iPad Air and iPad Mini with retina display introduced in October and response to the more affordable Apple Inc. (NASDAQ:AAPL) iPad Mini has been very strong. In fact, a November ChangeWave survey of customers planning to buy a tablet within 90 days found that 72% plan to purchase an iPad. And among customers who already owned an iPad, the survey measured a 97% satisfaction rate. We exited the quarter with 6.2 million units of iPad channel inventory, a sequential increase of about 2.1 million units, which placed us within our target range of 4 to 6 weeks of iPad channel inventory.

Based on the latest data published by IDC, Apple Inc. (NASDAQ:AAPL) iPad has a 78% share of the US commercial tablet market and iPad continues to spark innovation for businesses around the world. Leveraging custom developed and App Store apps, progressive IT organizations have embraced mobility, armed employees with iPad, and fundamentally changed the way people do their jobs. British Airways has deployed thousands of iPads to their employees across the business including senior cabin staff, engineers, check-in staff, pilots and ground crew.

At Kindred Healthcare iPads are now being used by the sales team, executive, and thousands of therapists nationwide resulting in millions of dollars in estimated savings and productivity gains for Kindred and their customers. In this football season nearly every team in the NFL used iPads as play books, replacing their traditional three ring paper binders.

In the education market schools continue to choose iPad and the great content available across apps, books, and courses. To date, US education institutions have purchased over 7 million iPads. In fact we’ve sold over 750,000 iPads to K-12 schools in the state of Texas alone, including 7,000 iPads rolling out to all K-12 students in the Midway Independent School District.