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.
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.