Apple Card: company reveals credit card launching next month
Apple has announced it will launch its own credit card in August, as iPhone sales continue to fall and the company seeks to diversify its business model.
The announcement by the CEO, Tim Cook, came on an earnings call on Tuesday after the company’s thirdquarter earnings beat predictions, sending shares up 3% in after-hours trading. The tech company reported a quarterly revenue of $53.8bn, higher than its previous estimate of $53.39bn.
Apple saw its sales of services and wearables rise as it continues to expand beyond the phones, computers and other hardware that made it famous, increasing funding to services such as Apple Pay, Apple Care and Apple Music.
Apple saw overall revenues fall in the previous two quarters as iPhone sales fell. In quarter three, sales of the iPhone made up less than half of Apple revenue for the first time since 2012, at $25.99bn compared with $29.47bn a year ago.
The Apple Card will include a user interface that shows customers where each purchase was made and the amount of the transaction. It will break down purchases into categories including entertainment, food, and shopping, and include cash back incentives rather than a points system.
Wearables, including the Apple Watch and Airpods, grew nearly 64% to $5.5bn in the third quarter, surpassing the iPad in sales.
“This was our biggest June quarter ever, driven by all-time record revenue from services, accelerating growth from wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” said Cook.
Cook said on the call the company was investing in more domestic manufacturing and would continue to assemble the Mac Pro in the US. Apple previously asked the Trump administration to exempt components of the devices from a 25% tariff placed on China imports. Trump has tweeted that Apple would not get tariff relief and should complete its manufacturing in the US.
“We’ve been making the Mac Pro in the US; we want to continue to do that,” Cook said. “We’re explaining that and hope for a positive outcome.”
Apple’s earnings were announced after major shakeups for the company in recent months. In July, Jony Ive, the chief architect of famous Apple products like the iMac and the iPhone, said he would be leaving the company after nearly 30 years.
The report also comes as big tech companies are facing more scrutiny and the threat of regulation from US legislators. On 23 July, the US justice department announced it was opening a broad antitrust review into major technology firms including Facebook, Alphabet’s Google, Amazon and Apple.
The investigation comes amid calls from lawmakers, including Democratic presidential candidates such as Elizabeth Warren, for tech companies to face more scrutiny.
Meanwhile, Apple has been touting itself as a privacy-minded tech company, announcing an anonymous “sign in with Apple” log-in system that the company has positioned as an alternative to Google and Facebook platforms that sell tracking information to advertisers.
“Battle lines have been drawn over how internet services should be provided, and as the iPhone becomes a smaller part of Apple’s business, winning with its privacy positioning will become vital,” said Kevin Joyner, the director of planning and insight at the analyst agency Croud.
Apple said it expected its fourthquarter revenue to be between $61bn and $64bn.