Editor’s note: Beau Skonieczny, an Analyst in the Computing Practice at Technology Business Research, offers his views on Apple’s latest earnings and prospects moving forward.

HAMPTON, N.H. – The 2Q13 marked a transition quarter for Apple (Nasdaq: AAPL) as the company is poised to launch new products in the fall of 2013 to help boost sales.

While the company is encountering growth and margin pressures from multiple factors such as saturation in the premium device space, price competition from Android vendors and a weakening global PC market, we believe Apple will continue to exploit its sticky ecosystem of software and services to maintain its industry leading device margins and penetrate emerging markets, as well as pursue new product opportunities.

Continued saturation in the premium device space coupled with weakening consumer spending ahead of new product introductions in 2H13 led to near flat revenue growth for Apple in 2Q13. The company achieved double-digit growth in iPhone units and revenue on a year-to-year compare, led by continued demand for iPhone 5 in the U.S., U.K and Japan, as well as strong emerging market demand for affordably priced iPhone 4 handsets. However, iPad and Mac products encountered challenges in the quarter. The introduction of the Retina iPad in March of last year led to a challenging year-to-year compare for iPad, contributing to a revenue decline of 27.4%. Mac sales, while benefiting from the launch of more energy efficient MacBook Airs in June, were weaker as the PC market continued to contract.

Emerging Markets Are Key

Apple continued to achieve relative success in emerging markets, supported largely by its entry-level iPhone products and the company’s focus on offering more affordable pricing options for customers in these markets. Apple had considerable success in India and the Philippines, which saw unit sales up over 400% and 140% year-to-year, respectively. Apple also made gains with iPhone in Eastern Europe, with sales in Poland and Turkey both up over 60% year-to-year.

TBR believes Apple will continue to target emerging markets to support growth opportunities into less established customer segments through its entry products. With a lower-cost iPhone targeting emerging markets expected to launch in the next couple quarters, we believe Apple is poised to not only sustain its growth momentum, but also expand its iOS customer base by targeting first-time smartphone customers. Apple will exploit the high propensity for Apple customers to remain in the ecosystem to secure not just additional device sales, but also additional revenue streams from iTunes, App store, software and services, fueling Apple’s industry leading margins.

A Price Competitive iPad Mini Will Help 

TBR expects Apple to introduce a Retina-based iPad mini product in the next couple of quarters, eclipsing the $329 starting price of the current iPad mini. Subsequently, we expect a drop in the existing iPad mini starting price to $249, supporting a greater value proposition for customers with limited discretionary spend in emerging markets, as well as those in mature markets looking for a second or third computing device. With a new Nexus 7 on the horizon expected to be released in the next month, we believe a more price competitive iPad mini will be key to combatting price pressures from Android vendors.

The education market continued to bear fruit for Apple in 2Q13, leading to a record 1.1 million iPads sold. iPad sales were supported by the first phase of a 660,000 unit rollout to the LA Unified School District. With a lower cost iPad mini, TBR believes Apple would sustain its growth momentum in the education segment, tying in younger generations to Apple’s iOS ecosystem and supporting long-term sales opportunities for future device purchases as students gain purchasing power in the consumer market.

(C) TBR