iPhone sales continue to drop as Apple’s services keep growing


Apple has just reported its second quarter financial results, posting quarterly revenues of $ 58 billion (5 percent less than the same quarter of the previous year) earnings per share of $ 2.46. The company said its crucial services division hit a record $ 11.5 billion in revenue. IPhone revenues reached $ 31.05 billion, even year-on-year, but enough to represent more than 53 percent of Apple's total revenue. Mac sales declined, but Apple's iPad, wearables / home / accessories and business services units posted gains.

"We deliver the greatest growth of our iPad in six years, and we are as excited as ever with our portfolio of innovative hardware, software and services," said CEO Tim Cook in the attached press release. "We look forward to sharing more with developers and customers at the 30th Annual Apple Developer Conference in June."

Analysts had projected $ 57.4 billion in general revenue (led by $ 30.5 billion in iPhone sales) and earnings per share of $ 2.37.


iphone sales continue to drop as apples services keep growing

The second quarter would be an improvement over Apple's damaging results in the first quarter when the company tried to cope with disappointing iPhone sales by reviewing its earnings guide and by publishing a letter from CEO Tim Cook that warned about the weak demand for improvements. during the holidays. IPhone sales had fallen 15 percent from the previous year. Cook also cited Apple's temporary battery replacement program and the phasing out of operator subsidies as reasons why consumers are slower to move to a new phone today. In the last quarter, US carriers, including Verizon and AT & T, posted record lows for smartphone updates.

Since that bad news in January, Apple's stock recovered and added almost $ 300 billion in market value. But the company continues to face major challenges in China, where the iPhone must deal with Huawei phones and other brands that cost much less money. Apple reported sales of $ 10.2 billion in China for the second quarter, and Cook told CNBC in an interview that the momentum had increased as the quarter progressed. "I think that the commercial relationship, I do not mean the tariff, I mean the tone, is much better today than in the November / December period. That affects consumer confidence in a positive way, "he said.

Today's earnings update comes in the weeks following a series of Apple product launches that included new models of AirPods, iPad Air, iPad mini and the iMac desktop On the subject of AirPods, Cook said that "this is just a cultural phenomenon." The company's Beats brand is now approaching the launch of its first true wireless headset, the Powerbeats Pro. [19659007] Apple attributed the iPad's strong performance this quarter to the iPad Pro. The company's flagship tablet has been frequently on sale for $ 100 to $ 200 off merchants like Best Buy, which is probably driving sales. With the fall of Mac's business, Cook said that "we faced some processor limitations in the March quarter" during the call to earnings, adding that "we believe that our Mac business would have I've recovered the last quarter without those restrictions. " The CEO of Apple also noted that the company obtained four times the volume of exchanges in this quarter of March compared to last year. "Now our goal is to accelerate the pace," he said of iPhone sales.

but Wall Street and investors have their attention fixed on Apple's services rather than hardware at this time. Last month, the company announced several new software initiatives, such as News Plus, Apple Arcade and Apple TV Plus. "These are not hobbies," Cook said during the afternoon call. "We would not introduce services if we did not think they could be significant." The subscription news service, which contains popular magazines with some newspapers, such as The Wall Street Journal was launched immediately for $ 9.99 a month.

However, Apple refrained from discussing the price of the game offering, which will give subscribers access to a package of titles that are exclusive to Apple's platforms, and Apple TV Plus, which will host the many programs and original TV movies. that the company is injecting billions of dollars to create. Cook said he expects consumers to have multiple streaming services in real time. "We are going to do our best to convince them that the Apple TV + product should be one of them," he said.

Both of these services are scheduled to launch sometime this fall, probably as part of iOS 13 and macOS 10.15. Apple will describe its plans for those important software updates at its World Developers Conference in June, and the company is expected to press for developers to begin migrating their iOS applications to Mac computers with new tools that will make it much easier. "You will not want to miss this one," Cook said of WWDC.

Qualcomm and Apple recently settled their contentious legal battle, with Apple making an undisclosed payment to Qualcomm and signing a new agreement to use the company's shares over the next few years. That agreement does not affect today's earnings report.


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