Apple Sells More iPhones Than Expected, Fewer iPads

Apple's earnings showed a tale of two mobile devices: The iPhone is doing better than expected, and the iPad is doing worse.

Apple was bound to see a drop in iPhone sales form last quarter, when it moved many of its just-released 5S model, but the 43 million iPhones sold last quarter easily beat analysts' forecasts of 37 million. The strong sales seems to have been driven by China, where the company recently penned a deal with China Mobile, the world's largest mobile operator. Apple said it increased iPhone sales in China by 28 percent, gaining market share and earning almost $10 billion in the country, its best quarter ever.

Tim Cook, Apple's chief executive, crowed about dominance in the tablet market. Ninety-five percent of the tablets sold to schools in the U.S. are iPads, he noted, and that over 90 percent of the tablets activated by American businesses and institutions are iPads. The company also has almost half of the consumer market in the U.S., but Cook thinks that would be even higher if you removed some simple devices that aren't true competitors to Apple's tablet.

'We continue to believe the tablet market will surpass the PC market in size over the next two years, and we believe that Apple will be a major beneficiary of this trend,' Cook told analysts in a conference call. Still, the total number of iPads sold-about 16 million in quarter-was significantly below the 19 million that analysts were expecting.

One reason for this could be that iPads more closely resemble PCs than iPhones in a key way: users replace their devices far less often than iPhone users do. Here's a look at iPhone and iPad sales over time: