Apple's latest quarterly results are in, and they are exactly what you would expect: portrayed by a company that is hugely profitable and successful, but whose main product lags while new product lines grow just as fast enough to make up the difference. I'm guessing we're yawning $ 53.8 billion in sales these days – that's the record for Apple's sleepy third quarter, but just up one percent over last year's record third quarter.
As always, the devil is in the details – and fortunately for us, Apple CEO Tim Cook and CFO Luca Maestri spend an hour on the phone once a quarter giving a few small details ̵
1; or as they will say in these conversations , "more color" – that can help us understand the current state of Apple's business, or at least how Apple execs want to characterize that business.
If it is a simple figure to step away from quarterly results, it is that iPhone represented less than half of Apple's total revenue for the first time in seven years. The rest of Apple's business is booming – revenue for the quarter increased by 17 percent if you don't include the iPhone, which isn't something you should be doing
. <img src = "https://images.idgesg.net/images/article/2019/07/morecolor-productline19-100806769-large.jpg" border = "0" alt = "Percentage of revenue by product line  Apple executives want you to note that iPhone sales in the quarter were down 12 percent year-over-year, as opposed to a 17 percent drop in the previous quarter, so iPhone sales are down, but less than that is not the strongest story.
The truth is that the iPhone now looks like a cyclical business, where sales shoot through the roof when a major change in design occurs, and then sales only slide down to three years later when it is another big change, now that Apple still generated $ 26 billion in iPhone revenue – even with sales slippage, iPhone is a huge, profitable business, but it's such a big part of Apple's business that it dominates how the company is evaluated. ruled out a massive change in iPhone design this year or next year, will This is likely to be the way things are for the foreseeable future.
The Emergence of the Rest
Over the past few years, Apple has been talking to anyone who would like to hear about the truly amazing growth rate in the new services category. And so it's worth talking about the fast-growing part of Apple's business … Wearables?
Yes, that is true. While services are still growing rapidly – up 13 percent compared to last year – it is not the fastest carrier in Apple's portfolio. It is the category formerly known as Other, and recently labeled as Wearable / Home / Accessories. The home of Apple Watch and AirPods has had ten straight quarters with double-digit percentage growth. After seven straight quarters with growth rates in the 30s, the category of revenues increased 48 percent this quarter.
Apple says that the portable part of the business was actually "well over 50 percent" and that Apple TV (also in the category) saw double-digit growth as well. Wearables / Home / Accessories represented 10 percent of Apple's overall business, making it larger than the iPad and almost as large as the Mac.
Cook couldn't resist collapsing a bit about how successful wearables have been for Apple, when many companies tried to take on Apple and Apple Watch specifically. "We stuck with [wearables] when others might not … and are in a very good position today to continue playing what's next," he said.
Meanwhile, services have become a huge business for Apple, accounting for 21 percent of total sales. Apple did not produce any data on how the latest service, Apple News +, is performing so far, which is not surprising, but also suggests that they could not figure out any numbers to reveal that would make them look good.
During the notice, Tim Cook said that the Apple Card would be available in August.
Apple CFO Luca Maestri warned analysts that it may take some time to increase revenue from the new subscription business. , which includes the upcoming Apple Card, Apple Arcade and Apple TV + services. Keep in mind all these services, there is a trial period ahead, there will be different trial periods, we will see how they look. So the road to monetization takes some time. "
Apple said that the total number of paid subscriptions now exceeds 420 million, which includes Apple's services as well as subscriptions fulfilled through the App Store. Third-party revenue from app subscriptions increased by 40 percent during the quarter.
What trade war?
If you haven't heard, there is a lot of friction between the US and China regarding trade, and Apple was specifically mentioned by President Trump last week who suggested he didn't look too friendly at Apple's building as many of the units in China.
When asked about it during the analytics interview, the ever-cautious Cook didn't take the bait. "I know there has been a lot of speculation around the topic … I wouldn't put much stock in these if I were you," he said. Cook made it clear that he is a true believer in the global supply chain. “The vast majority of our products are made in a way everywhere…. Mostly, I think it will carry the day in the future as well. ”
The upcoming Mac Pro: Made in USA?
However, despite reports that Apple is planning to make the new Mac Pro in China, Cook said Apple "wants to continue" to make the Mac Pro in America. "We are currently working and investing in capacity for that, because we want to continue to be here," he said.
It is a fascinating line that Cook has to walk because Apple is both a US company with many businesses and an international company with a global supply chain. How to cut the needle to make the president trump all Apple's US jobs and investments on new campus in the US while getting the concessions he needs to continue to mount products in other parts of the world?
Cook's cautious language is difficult to show. A chef who shows confidence in the global supply chain, while also dangling the possibility of putting together Mac Pros in the US is quite a move. We'll see what happens next.
Tim Cook likes to tease us
One last thought about Cook: He knows full well that everyone, from the most highfalutin Wall Street analyst to your everyday person on the street, will know what Apple is doing next. Try asking Cook a question about a future product, and he'll turn you down. An analyst wanted to inquire about the future of the iPhone in a 5G world, and Cook immediately broke out a "we don't comment on future products" before saying that we are currently in the "extremely early stages" of the 5G transition.
Sometimes Cook can have fun with it. Towards the end of the prepared statement that began Tuesday's conversation, Cook – who said he suffered from an allergy and cough and cleared his throat during the conversation – suddenly with a rush of friendly energy.
"And without giving too much away, we have several new products that we can't wait to share with you. Until then, thank you for joining us today," he said.
New products, right? I'll see you in September, Tim.