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Apple wearables and services compensated for weak iPhone sales



But again, that was to be expected. As the story goes, Apple – which can't rely on people cracking up on expensive new iPhones as they used to – focus on service business. It's not hard to see why, either: Over the past two quarters, iPhone sales have dropped significantly year over year as Apple's service revenue continued to rise, peaking at $ 1

1.4 billion three months ago. The upward trend continued in the third quarter, when Apple saw its service revenue squeak by the record it set in the second quarter of this year.

This balance may shift next year, as Apple is expected to release its first 5G iPhones – the acquisition of Intel's modem business puts the company in a strong position to more integrate the network hardware into its devices, and if Apple is really lucky, they can The releases get a major upgrade cycle. For the time being, however, the iPhone decline continues, and the device's still soft performance in Greater China – once a powerhouse for iPhone sales – certainly didn't help. That's not to say that there was no improvement: Cook noted that the situation there was significantly better than at the beginning of the year, and that Apple returned to mainland China growth.

That said, sales for Macs ($ 5.88 billion) and iPads ($ 5.02 billion) show that diligent hardware upgrades have a significant impact on the bottom line. More importantly, Apple saw the notebook business – which includes Apple Watch, AirPods, Beats and more – swell by nearly $ 2 billion since this year, cementing the fact that future growth doesn't necessarily hang on smartphones anymore. Cook went so far as to describe this quarter as a "blowout" for wearables, citing a growth of around 50 percent.

As worldwide demand for advanced smartphones continues to look bleak, however, Apple's best choice for continued economic growth is to expand its horizons beyond hardware. The answer is hoping Apple comes in the form of some potentially lucrative new services. Although Apple News + mainly repackages and deals with existing content, the company is in the process of delivering a host of exclusive games and streaming shows later this year. And then there's the Apple card, which, while lacking anything compared to some of the other reward-heavy options out there, can become something of a status symbol as the company's AirPods have. (The fact that it could make Apple a cool $ 1 billion a year without a lot of work is just the icing on the fiscal pie.)

The Apple card will apparently make its debut sometime in early August, while Apple Arcade and Apple TV + will officially launch at this fall's iPhone event in Cupertino. Until then, the company is in the middle of a transitional period where it is waiting for the future efforts to be carried out. As usual, Apple has gotten Apple so far, but in order for it to continue to grow, the coming months will have to be anything but. As usual, we expect CEO Tim Cook to shed a little more light on these economies during the regular revenue talks, so we will update this story as his comments continue.


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