Apple reports record quarter
Services and Wearables make up for iPhone decline
Apple has reported its biggest June quarter ever, with all-time record revenue from Services and strong growth in Wearables, iPad and Mac more than compensating for a 12% year-on-year drop in iPhone revenue.
Total revenue for the quarter ending 29 June 2019 was $53.8 billion (about £44.4bn), 1% up from the June quarter a year ago. Hostile observers focused on the fall in iPhone
revenue, but what’s notable is the surge in other areas: Services in particular soared to $11.5bn (about £9.5bn). Under this heading, Apple Care, Apple Music and the App Store hit all-time revenue records. Excluding a one-off accounting adjustment last year, revenue from Services grew 15% year-on-year.
There was growth in other areas too. Mac revenue was up $500m (£412m) year-on-year, rising in four out of Apple’s five geographic
this was the third consecutive quarter of iPad sales growth
segments and setting records in Japan and the US. iPad sales were also up $365m (£300m). This was the third consecutive quarter of iPad sales growth, and despite commentators’ claims the tablet market is saturated, Apple reported over half the purchases in the quarter were new to iPad.
Further rises
Apple’s ‘Wearables, Home and Accessories’ category – including Apple Watch, AirPods and HomePod – also rose 48% year-on-year to over $5.5bn (£4.5bn). Apple noted that for more than 75% of customers buying Apple Watch in the June quarter it was their first one.
About the increase, CEO Tim Cook said: “We continue to see phenomenal demand for AirPods, and when you tally up the last four quarters, our Wearables business is now bigger than 60% of the companies in the Fortune 500.”
Geographically, revenue rose in the Americas, Japan and the Asia Pacific regions but declined in Europe and Greater China. Apple noted that the strength of the dollar was a factor in this and the company faced a “very challenging environment”. Even in China, however, there were signs of recovery, and the App Store in China was a driving force behind the growth in Services.
Services accounted for 21% of the quarter’s revenue, with iPhone now down to 50%. However, the iPhone market is far from dead: Apple reported that iPhone sales in retail returned to growth, with in-store trade-in and financing offers having a positive effect, and Apple said its active installed base of iPhones reached “a new all-time high and was up year-overyear in each of our top 20 markets”.
The active installed base of Macs is also at an all-time high, and Apple sees all these active users continuing to increase demand for services, including forthcoming services such as Apple Card, Apple Arcade and Apple TV+.