Inside Scoop: Apple iPhone sales fall below expectations

Hi and welcome to Inside Scoop. I'm Lexy Savvides, joined by Shara Tibken, Senior Writer for cnet.com. Now Shara, we're talking Apple's third quarter earning. Traditionally the weakest quarter, has this been the case this time around? Yeah. It was another weak quarter for Apple, which was actually kind of surprising. People had really expected the iPhone momentum to keep going, but we actually found that they didn't sell quite as many iPhones as analysts expected. I mean, this isn't saying it was a horrible quarter, it was actually a pretty strong quarter, they sold 47 million iPhones. But analysts were expecting 49. And what did Tim Cook say on the call, did we get any insights into other parts of the performance from Apple, this quarter? Tim Cook is always very optimistic, always saying everything is great, everything is wonderful. So when it came to the iPhone, he said, everything is great, people are still buying them, but the issue for Apple is, we're coming up against some really hard comparison. The iPhone 6 is the biggest device that they've ever sold. Both by the screen size and for demand. Millions and millions of people have been buying this. So the problem is, what can they do with the iPhone 6s that really gets people to buy the iPhone again and not just hold on to their other device And going screen sizes to the smaller screen size on the wrist which was the watch which is obviously a big part of the earnings this quarter. What sort of insight did we get into how Apple Watch performed. We didn't get much insight at all. Apple said that they weren't going to break out Apple watch sales and they didn't. It falls into the other products category which now also is iPod beats accessories. That increased about $900,000,000 dollars, $952,000,000, actually. Sequentially, from the second quarter, which didn't have the Apple Watch. You can't just assume that means they made $952,000,000 from the Apple Watch, but they said all of their growth in that category came from the watch. So things like iPod accessories, those are still dropping a lot. Beats probably also had a weak quarter, but we don't know because they don't break it out. Apple did say that the watch is doing better than the iPhone and iPad when they first started selling them, but both of those devices were just available in the U.S. at first, whereas the Apple watch was available in 9 countries. So not really sure if it's quite a fair comparison, but Apple's still very optimistic. Great. Well, thank you Shara, and of course if you wanna catch up on the rest of Apple's earnings, you can check out our full coverage on cnet.com. [SOUND]