Apple isn’t immune to the economy: despite posting a record financial quarter, the firm ended the quarter with fewer paid subscribers than the previous quarter.
“Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment,” Apple CFO Luca Maestri said. “We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category. During the quarter, we generated nearly $23 billion in operating cash flow, returned over $28 billion to our shareholders, and continued to invest in our long-term growth plans.”
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Apple posted a net income of $19.4 billion on revenues of $83 billion for the quarter ending June 25, 2020, the latter of which grew only 2 percent year-over-year. Mr. Maestri admitted it was a “challenging operating environment” and noted that there were “pockets of softness” in its business in the current quarter, in keeping with what other Big Tech firms have reported this week.
iPhone was predictably the company’s biggest business segment by far, with $40.6 billion in revenues, but Services surged about 11 percent in the quarter to $19.6 billion and is Apple’s second biggest business.
All of Apple’s other business units delivered fewer revenues than the year-ago quarter.
Wearables, Home, and Accessories delivered $8 billion in revenues, a decline of 7.9 percent. The Mac provided $7.4 billion in revenues, a decline of almost 10.4 percent. And the iPad brought up the rear with $7.2 billion in revenues, a decline of 2 percent.
The Services business is perhaps the most interesting: despite the revenue gains, Services lost 9 million subscribers quarter-over-quarter, the first time Apple has ever reported that kind of downturn. But CEO Tim Cook sounded an optimistic note by claiming that the firm “had a record level of switchers [from Android],” leading to “double digit growth for customers new to iPhone.” Those customers could begin paying for more and more Apple services in the future.