Apple Beats Estimates as iPhone Revenue Drops Below Fifty Percent
Apple reported its earnings today for the second quarter of the calendar year and beat Wall St. expectations. The company had $53.8 billion in revenue and is projecting $61-64 billion in revenue for the upcoming quarter.
The big item to note during this latest quarter is that iPhone revenue, the company’s largest single product by a significant margin, has fallen below 50% of the company’s overall revenue. Apple stated that iPhone revenue came in at $25.99 billion for the quarter and that its services revenue of $11.46 billion during the same period.
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Apple credits growth in wearables and strong performance with the iPad with helping push their revenue higher for the quarter. The company says that for the remainder of 2019, they will have new products and services for all of their platforms.
But the real news here is that Apple has found a way to successfully counter its slowing iPhone sales. Yes, the company still sells in the tens-of-millions of iPhones each quarter but the growth has stagnated. That’s not a knock against Apple but it simply means the phone has reached a saturation point where triple-digit growth, or even single-digit growth, is not sustainable.
Instead, the company’s other product lines, most notably the services side of the company, is helping to fill the growth gap that the iPhone has left behind. With the iPhone now accounts for less than 50% of the overall revenue, the company is lowering its exposure to a weakening sales pipeline for the hardware.
Conversation 41 comments
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Thom77
<p>I believe this is earnings for the third quarter, not the second.</p><p><br></p><p><br></p><p>In my world, successfully <em>countering</em> slowing Iphone sales would mean doing something to increase Iphone sales or at the very least, decrease the decline. You don't counter decrease in Iphone sales by pointing out your services is making money too. Thats not countering … thats just spinning that even though product A is decreasing in sales, product B is making up for it (hypothetically). </p><p><br></p><p>Also, I don't understand why a tech journalist would state a fact that even Apple does not deny, then proceed it defensively with "but I'm not knocking Apple." Will you inform us when you ARE, in fact, knocking Apple? The truth is that tech journalism, as a whole, is highly compromised, and although I am not accusing Brad of being compromised, comments like that does cast a shadow on his integrity at least for me who are suspicious of journalism in general, especially tech journalism concerning Apple, who has a history of blackballing people critical of them. </p><p><br></p><p>And the last sentence, which is awkward by the way, seems to somehow try to spin that decrease in Iphone sales isnt all that bad, because at least Apple is lowering its exposure to weakening hardware pipelines. Again, this reeks of spin and I guarantee you that Apple would rather have increase Iphone sales and difficult hardware pipeline problems, then decreasing sales that they can easily supply hardware for.</p>
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Stooks
<blockquote><em><a href="#446075">In reply to Thom77:</a></em></blockquote><p>Ever heard of the term "overthinking it"?</p><p><br></p><p>It is better to make the same amount of money from multiple products than from just one.</p><p><br></p><p>If hard core privacy laws came down from the federal government, a company like Google or Facebook would tank and tank hard because they are "one product" companies.</p>
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Stooks
<blockquote><em><a href="#446170">In reply to jrickel96:</a></em></blockquote><p>Until the iPad has real pointer support (mouse/trackpad) I do not see it really doing anything other than work the replacement cycle for 80% of current iPad owners. </p><p><br></p><p>I have seen a lot of iPad sales early on in the corporate environment and the vast majority of them get little on no use, with many that just collect dust. My daughter is about to start college. Her university is part of some Apple learning program and every student gets a iPad with pencil (yes I am sure I pay for it). She got hers a few 3 weeks ago at her orientation weekend. She has yet to even power it up, but her new Lenovo T490 with touch screen that we bought her and received a week ago gets used daily.</p><p><br></p><p>I also have little doubt that if iPhone sales really tank, Apple would open up all of its services to other platforms. </p>
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Stooks
<blockquote><em><a href="#446219">In reply to Jeffsters:</a></em></blockquote><p>If I am going to go with a laptop these days it wont be a Macbook. I have a 2017 15inch Macbook pro that I do not like using because of the keyboard. If they get rid of that keyboard in the future I might consider a new Macbook.</p><p><br></p><p>The lure of the iPad with mouse/keyboard support is that I could use it traveling as a light weight, long battery life laptop replacement while on vacation or whatever. Use native apps much better with mouse/keyboard and use it to VPN/RDP into work desktop if I needed too. Without mouse support is it just not an option for that use case, and it remains a consumption device for me. </p>
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dontbeevil
<blockquote><em><a href="#446078">In reply to dkrat:</a></em></blockquote><p>security flaws included?</p>
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dontbeevil
<blockquote><em><a href="#446668">In reply to Jeffsters:</a></em></blockquote><p>first you're talking about imessage (an app), apps get updates also on android… than you talk about OS updates, but also you stuck in years ago, I'm not a fan of android but my huawei p10 still get updates and soon will get android 10</p>
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wocowboy
Premium Member<p>All cellphones from all manufacturers are, I think, reaching commodity status. They are all excellent devices capable of doing whatever the user wants and needs to do with little differentiation between them except in more exotic ways if that is the right word for it. The hundreds of tech YouTubers who breathlessly release daily videos about the latest cellphone rumors, "I ditched (name of phone) for (name of phone)", etc, are running out of material to hawk or complain about (and I could not be happier). The world is waiting for the next big tech thing, I have no idea what that is, but this is a mature market now. </p>
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dontbeevil
<p>strange that this article is not wirtten by hassan</p>