Updated from 8:26 a.m. EDT to provide analyst comments in the seventh paragraph.

"Are you not entertained!?!?"



) -- Pulling his best Maximus Decimus Meridius from




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CEO Tim Cook said he simply doesn't see the same smartphone slowdown that many thought to be going on in the high-end segment of the market. That's a positive sign for investors, even if Apple's report did have some "bitemarks" in it.

When asked about the increasing concerns that people have about the

smartphone market slowdown

, Cook said he simply doesn't see it. "And I don't subscribe to the common view that the higher end if you will of the smartphone market is at its peak," Cook said. "I don't believe that but we will see and we will report our result as we go along."

Judging by Apple's

earnings report

, Cook may be right about there being no slowdown at the high-end of the market, but it's also noticeable that the average selling price (ASP) of iPhones continued to trend lower this quarter, dropping under $600 to $580 per phone. That was a big decline sequentially, as the iPhone 4/4S continued to still sell well.

"iPhone ASPs declined 4% Y/Y to $581 which suggests relatively strong uptake of the lower priced iPhone 4 (vs. iPhone 5) in developing markets," wrote Deutsche Bank analyst Chris Whitmore in a note.

Total iPhone sales were up sharply during the quarter, as Apple sold 31.2 million iPhones. That's up from 26 million in the year-ago quarter, showcasing 20% growth, which is pretty healthy for the company's biggest revenue generator. The iPhone 5 is still the top selling phone for Apple, as Cook and Chief Financial Officer Peter Oppenheimer mentioned on the call last night repeatedly.

Morgan Stanley analyst Katy Huberty, who rates Apple "overweight" with a $540 price target, believes that the strength in the iPhone points to the "stickiness" of iOS. "Strong iPhone sales point to stickiness of ecosystem as Y/Y unit growth accelerated to 20% (from 7% in March Q) despite a channel inventory reduction," Huberty wrote in a note.

More growth from Apple's biggest revenue driver is expected to come, noted Credit Suisse analyst Kulbinder Garcha. "Going forward, we see further catalysts to spur growth. First, we see an iPhone 5S and low-end iPhone coming in late FQ4 and believe that, net-net, this will be additive to growth," Garcha wrote in a note. "Second, we see additional carriers as a significant driver for Apple's high-end business, and continue to believe that China Mobile and NTT DoCoMo will be added within the next 12 months. We see the potential for iPhone volumes to grow to over 200mn in CY14." He rates Apple "outperform" with a $525 price target.

There's been plenty of concern that the team of




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have been eating Apple's proverbial lunch in the smartphone market, as Apple has continued to lose market share. Some have even started to move toward


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Windows Phones, though that is still distant to both iOS and Google's Android.

While the iPhone may have lost market share, consumers are still incredibly happy with it, with Oppenheimer noting the iPhone is the "number one or number two selling smartphone manufacturer in most markets IDC tracks including North America, Western Europe, Russia, Turkey, Australia, Hong Kong, Thailand, Malaysia and Singapore."

Apple is expected to release the

iPhone 5S later this year

, and many are expecting a low-end iPhone to help spur growth at Apple's biggest segment.

Perhaps a low-end iPhone, which many are expecting, won't be priced as aggressively as some think. Garcha believes the phone would retail at $329, and Apple could deliver 35% gross margins on the phone at full ramp. However, a $580 ASP for the quarter suggests maybe Apple won't be as aggressive on price with the low-end model, and that could alleviate investors' fears.

The timing on when the new products are coming is still a bit of a mystery, as Apple's gross margin guidance for the fourth quarter was slightly higher than some were expecting. For the fourth quarter, Apple expects revenue to be between $34 billion and $37 billion, with gross margins between 36% and 37%.

On the earnings call, Oppenheimer said, "We're on track to have a very busy fall." Many were expecting a September refresh for the iPhone, but it could be October, with margins seemingly better than expected for the fiscal fourth quarter.

The iPhone was able to generate $18.2 billion in revenue for Apple, despite concerns of a slowdown in the smartphone market, and the high-end in general. The iPhone 4 is likely to be bumped out when the 5S is released, which could hurt margins a bit as new products tend to have lower margins than older ones, and while Apple squeezes out every last bit of profit it can.

While other products like the iPad, Mac and to a much lesser extent, iPods, still generate significant amounts of revenue for Apple, the company still gets the majority of its sales from the iPhone. Cook's confidence should resonate a chord with investors that perhaps some of the fears are overblown. "I think we're at the very front end of that and so I think we have lots of growth opportunities."

The results proved there may be a little turning of the tide on fears relating to Apple. Shareholders may finally start to respond by bidding up shares.

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Written by Chris Ciaccia in New York

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