While iPhone sales dipped, the company managed to generate most of its revenue through its wearables businesses and offered a better-than-expected outlook for the next quarter.
For the first time since 2012, less than half of its total quarterly sales revenue came from sales of the iPhone, an indication that the company is stepping away from relying as heavily on its flagship product.
On Tuesday, Apple reported revenue of $53.81 billion (up 1% annually) in June’s quarter.
The September quarter revenue outlook looks promising, however, forecast at $61 billion to $64 billion revenue (down 3% to up 2%), above a consensus estimate of $60.9 billion.
Shares rose 4.2% in after-hours trading to $217.52, having beat Wall Street estimates, and leaving them once more toying with a trillion-dollar market cap. Shares are up 38% on the year, after having plummeted during the last three months of 2018.
Seven years later, iPhone sales now represent less than half of the company’s overall sales, resulting in a drop by $741 million on this period last year.
According to the tech giant, the drop in sales is down to its Chinese audience. Sales fell 4% to $9.16bn, after a drop of 22% in the second quarter. However, exchange rates help to explain the reasons why Chinese customers are no longer able to afford the iPhone.
3 reasons why Apple shares are up
- The booming success of the Wearables, Home and Accessories category, mostly Apple Watch and AirPods
- Innovative services such as the App Store, Apple Pay, Apple TV, Apple Music, continue to grow
- Increase in the number of people paying for Apple subscriptions has risen by 55% in the past year to 420 million
Overall, Apple’s future looks healthy and promising. Apple forecasts sales of between $61bn and $64bn for the final three months of its financial year.
Indeed, improving Chinese sales trends and a booming, successful quarter for both Apple Watch and AirPods, are helping Apple shares rally post-earnings.
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