Apple Delivers Blockbuster Quarter Despite Slow iPhone Sales

Posted on July 31, 2020 by Paul Thurrott in Apple, Apple Watch, iOS, iPadOS, Mac and macOS with 10 Comments

Apple reported net income of $11.25 billion on revenues of $59.7 billion in the quarter ending June 30; revenues surged 11 percent year-over-year despite a global pandemic and slower-than-expected iPhone sales.

“Apple’s record June quarter was driven by double-digit growth in both products and services[,] and growth in each of our geographic segments,” Apple CEO Tim Cook said in a prepared statement. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation.”

Apple’s iPhone business was basically flat from a revenue perspective: It posted $26.4 billion in revenues compared to $26 billion in the year-ago quarter. The iPhone is still, by far, Apple’s biggest business, and it now represents 44 percent of its total revenues.

All of Apple’s other businesses saw sharp upticks in the quarter. The Mac grew from $5.8 billion revenues a year ago to $7 billion in the most recent quarter. iPad grew from $5 billion to $6.6 billion. Wearables grew from $5.5 billion to $6.45 billion. And services grew from $11.5 billion to $13.1 billion.

In Apple’s post-earnings conference call, Mr. Cook said that the pandemic hurt iPhone sales because consumers couldn’t get into stores. But it benefitted Mac sales because of work- and school-from-home orders. Indeed, the Mac set a Q2 revenues record, while iPad saw its biggest quarterly revenues spike in 8 years.

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