Apple shares soar despite 17% drop in iPhone revenue

Apple shares soar despite 17% drop in iPhone revenue
Apple reported today that it barely topped Wall Street estimates for iPhone and Services revenue during its fiscal second quarter, which ran from January through March. The company took in $31.05 billion from sales of its smartphones during the quarter, barely topping the $31.03 billion that Wall Street expected. Since the end of the fiscal fourth quarter, Apple has stopped revealing how many iPhone units were sold during the period. The revenue figure is a 17% decline from the same quarter last year

While iPhone sales have been struggling, Apple has been focusing on its Services business, which includes AppleCare, iTunes, the App Store, Apple Music, Apple News+, Apple TV+ and Apple Arcade (starting this fall). Apple has had a goal of reaching $50 billion in Services revenue, which would double the $25 billion it took in during fiscal 2016. For the fiscal second quarter of 2019, Apple generated $11.45 billion from the Services unit, its second largest and most profitable division. That not only topped the $11.37 billion that Wall Street was looking for, but it was also a 16% boost from the $9.85 billion that the Services unit brought in a year ago. By adding more subscription services such as Apple News+ and Apple TV+, the company is looking to take advantage of an installed base that is now numbered at 1.4 billion devices. Apple had 390 million paid subscriptions during the three months.

During the quarter, Apple garnered $4.87 billion in iPad revenue. That was a healthy and surprising 22% improvement from the $4 billion that the tablets brought in during the fiscal second quarter of 2018, and beat analysts estimate of $4.21 billion in sales. It also was the highest growth rate for the device in six years. The Wearables unit, which includes the Apple Watch and the AirPods wireless Bluetooth earphones, had $5.13 billion in revenue for the three month period. Last year, the division grossed $3.94 billion. That works out to a strong 30% year-over-year growth rate for the unit and easily topped the $4.79 billion that Wall Street was looking for.

Apple's shares soar 4.8% after the fiscal second-quarter earnings were released

With the problems that Apple has had in China, where it had to cut iPhone prices at the wholesale and retail levels, sales in the country declined from $13.02 billion to $10.22 billion. Sales rose slightly in the Americas and Japan while declining in Europe and Asia (minus China).

Overall, Apple earned $58.02 billion in the quarter, down more than $3 billion from the same quarter last year. While net income declined to $11.56 billion from $13.82 billion year-over-year, the $2.46 earnings per share figure topped Wall Street consensus forecasts by a dime.

Investors ate up the report, along with the news that the company raised its quarterly dividend by 5% to 77 cents a share. While Apple closed the regular trading day at $200.67 a share, down 1.9%, after the report was released the stock rose 4.8% or $9.61 to $210.28 a share. At that price, Apple is worth $987 billion and is closing in on a trillion dollar valuation for the second time.



1. kiko007

Posts: 7493; Member since: Feb 17, 2016

Those cheaper iPad options seem to be paying off. Tablets as a category may be losing steam, but the iPad is still doing really well. The iPhone situation is a little more nuanced, though. I don't think Apple would risk losing more revenue by lowering the price a few hundred bucks (even though I think that'd make a world of difference sales wise) but there's no way they can maintain their current pricing strategy. Services look good overall in spite of the lower iPhone sales too.

2. cmdacos

Posts: 4220; Member since: Nov 01, 2016

They should soar. Scamming people by giving half baked subscription services knowing a good chunk are too dumb to cancel even though they'll never use it is a solid business plan.

3. kiko007

Posts: 7493; Member since: Feb 17, 2016

Please go troll elsewhere if you've got nothing to add. We all know the only reason you posted this is goad a reaction, which is petty and childish.

9. cmdacos

Posts: 4220; Member since: Nov 01, 2016

Sorry lady. I'll stick around.

6. Zylam

Posts: 1817; Member since: Oct 20, 2010

Galaxy Fold disaster

12. iloveapps

Posts: 855; Member since: Mar 21, 2019

Now your crying because your Sammy mobile division can’t even come close to what Apple’s profit making. Samsung mobile has been declining for years eaten by chinese phones. 1.4Billion active devices seems pretty good for the new Apple services. No OEMs comes close with that. With the declining iphone sales, of course, more people don’t buy iphone every year as iphone last better again comapred to any android junk-cheap products.

45. wickedwilly

Posts: 701; Member since: Sep 19, 2018

The reason iPhone sales are falling fast is outside the US and a few other areas, buyers have seen through Apples marketing and realize there are better products than can be had for less cost. They also realize, contrary to what you say, that far from being junk-cheap products they are better designed and more robust than iPhones.

17. whatev

Posts: 2285; Member since: Oct 28, 2015

You haven’t been using the butthurt cream, you really like to suffer *smh

4. sissy246

Posts: 7121; Member since: Mar 04, 2015

Apple always gets back on their feet, no surprise here.

7. darkkjedii

Posts: 31105; Member since: Feb 05, 2011

I can’t even hate on Apple for knowing how to get money. Gotta give em credit on that.

13. iloveapps

Posts: 855; Member since: Mar 21, 2019

Gonna give credit to apple to for replacing older phones with new batteries for low cost. Most of my relatives are using iphone 6s, 7 and Xr. They’re are still smooth like day 1.

14. mootu

Posts: 1526; Member since: Mar 16, 2017

"Apple always gets back on their feet, no surprise here." Revenue down 17% year on year and iPhone sales down 15% is not "getting back on their feet", this article is just spinning the situation to sound better than it is.

23. whatev

Posts: 2285; Member since: Oct 28, 2015

28. oldskool50

Posts: 1602; Member since: Mar 29, 2019

I have a question and its simple. What is the direct benefit of apple sales for you? Don't all big corporations make billions of dollars? The iPhone has been a top selling single model for a while. SO WHAT!!!! After all, it is the ONLY model they make. Even though other OEM's have several products, they all still have top selling models. The iPhone is the top selling single model. but Apple has never sold more phones than any of the top companies. whether they still make phones now or not. So the whole sales cheer-leading just seems dumb. wouldn't it better to brag about something like, the iPhone is the best selling phone, and it has the best cameras, biggest batteries, the most storage, FPS, 98% screen real estate, the highest resolution and all the plus it SHOULD have considering how much they cost and how many they have sold? I'm so happy they can sell their phone. God knows they have thrown enough marketing money at it to be the best selling phone it is. But that's all you got bruh. You seem to be only content with the fact, you have the best "selling" phone in the world. But then in the back of your mind, none of that means a darn thing, when its behind lesser selling phones in so many ways. Every phone is best at something. Wouldn't you want it to also be the best at what matters to you and that directly benefits you? Because sales don't benefit you and they never will directly.

31. midan

Posts: 2917; Member since: Oct 09, 2017

They don’t only have best selling phone in the world, they have top 4 best selling phones in the world. And 6 of top 10 best selling phones worldwide are iPhones. By the way i’m still waiting answer to where i can buy micro LED TV now.

39. oldskool50

Posts: 1602; Member since: Mar 29, 2019

Whatever dude. It's one phone. period. I don't care that you split them over sevrel places. I don;'t care about sells. Nothing you say abou them will ever impress me dude. Sells only impress fanboys, because that's all you got to brag about. You've never made money sell millions of anything so cheer leading someone other than you doing it is completely foolish. But I have sold a million of something, and I know exactly how great it is, and yet I still don't care about sales, unless they directly effect me. here is what is so funny, I was watching Painfully Honest tech on YT. he was talking about how the iphoen 11 is gonna look. Everyone liek they did with the 6, says that Appel would not make somethign so ugly, and yet they did and are YET AGAIN. With all that money that you keep bragging about, then why can't they make a better looking design vs the 6 and 11? One of the posters said and I quote and you can go see it for yourself on YT, his name is Jason said, "Apple has always been about form over function" and he also said " you can't have both". Other OEM's have shown you sure can have a very functional device without sacrificing ANYTHING and have lots of function. In fact Samsung proved that starting with the S6. But there were more very good looking phones before the S6 that didn't use metal and glass. They are suppose to sell everything because that is their business. They are suppose to make money. But cheer-leading because they make more than someone else is dumb. Lots of companies make more money than others in their product category. But you don't see Intel fans cheer leading, you don't see Coke fans cheer-leading, you don't see McDonald's fans cheer-leading. All of them are top dogs and have seen for decades in their product segment. You all are gonna keep on cheering things that don't matter, until Apple ends up like Nokia. And if they don't wake up that's exactly where Apple is gonna end up, just like Nokia. Nokia lasted for a long time. WHERE ARE THEY NOW. Think it can't happen to Apple? It almost did before.

42. whatev

Posts: 2285; Member since: Oct 28, 2015

Ask him if he already knows how to calculate percentages, that was epic

33. sissy246

Posts: 7121; Member since: Mar 04, 2015

I am far from a Apple fan but, even I can admit that apple knows how to get the money. Yes , sales are down but they will always bounce back.

40. oldskool50

Posts: 1602; Member since: Mar 29, 2019

No they won't always bounce back. One thing that has changed is due to phone prices, people will be holding on to their phones longer. That sure is gonna mean at some point, there is going to be bigger gaps in upgrades. There will always be new upgrades every year at first. But as time goes buy and phones are getting even better, people will be on 3 -4 year upgrade cycles which means with less people buying phones per year, the only way to recoup loses is with other products. Samsung had never made all its money from phone sells, so Samsung could lose 100% of its phone sales, and they will still be fine. if Apple lost 100% of its phone sales, they would die a horrible death. Their services alone would not be enough, they are not IBM or Microsoft. IBM managed to build its services to a point they make more money with it vs hardware. But they also already had years of established relationships. Because Apple services are less cross-platform, if they lose iPhone their services will take a huge hit at some point. This is why MS worked to make their services more like Google, where they are more cross-platform because if one platform dies, the other can pick up the slack. With 1.4B iOS devices in the wild, I'm not saying Apple is going anywhere soon. But what I am saying is, both Apple and Samsung have hit a price ceiling where Apple is now unable to compete in any category below $1000 and the more phones avail for less are gonna sell even more and Apple is gonna be in a bind when people stop buying newer phones, because only newer phones will work with their services.

5. djcody

Posts: 228; Member since: Apr 17, 2013

That's almost 450k per minute income Very impressive

8. CreeDiddy

Posts: 2216; Member since: Nov 04, 2011

Everyone wishes they were Apple. They are still control of their own market.

29. oldskool50

Posts: 1602; Member since: Mar 29, 2019

"Everyone wishes they were Apple." - YOU. Like who. name one company that you have ever public said, they wanna be like Apple. Lot's of companies make lots of money, and no they don't want to be like Apple. They don't want to be sued all the time. They aren't gonna be purpose stealing stuff from companies. They won't sign a contract and refuse to pay it. Because of that would include being liek Apple. because those are the shady things you do to get to the top. Oh and selling defective products and then making yoru customers pay for the repairs too. Is alsoo something that has been a big deal for years. Sure many companies would like to have Apple money. and quite frankly, several like google, Microsoft and others have already been their and done that well before Apple ever did. But no they all don't want to be like Apple, because if they were, the industry would be full of turmoil doing nothing but filing lawsuits, while products fall in quality as we have see with Apple and others.

34. Foxgabanna

Posts: 599; Member since: Sep 11, 2016

This was the dumbest thing i've read in my entire life.

41. oldskool50

Posts: 1602; Member since: Mar 29, 2019

I guess you're not smart enough to understand. That's YOUR fault not mine. if you claiming the quality of today's Apple products ar anythign liek they were in the past, you are only fooling yourself. Bending phones and tablets? name another OEM's who sells a $800 tablet that bends like paper? Even the Note 3 was better vs the iPhone 6+. The Surface pro yes can be bent too, but you can't bend it in half with your bare hands, liek you can the iPad. Why si that? What up with the mac keyboards? Apple purposely bought a modem from Intel they knew didn't work just to hurt qualcomm. They put cheap batteries in their phones. They knew based on release doc that the iPhone 6 would bend, but they didn't care. Liek Boeing who refused to ground their own airplane even after to deadly crashes. In both cases, quality has taken a back seat to money. Just because your phone isn't gonna fall out the sky with you ain't it and kill you, doesn't mean the quality hasn't gonna down. if you claim it hasn't then, take those blinders off, because even faithful Apple fans are complaining and sales are showing they aren't. What I said about other companies is factually true. I dare you to be able to prove anything I said to be wrong.

43. midan

Posts: 2917; Member since: Oct 09, 2017

”The Surface pro yes can be bent too, but you can't bend it in half with your bare hands, liek you can the iPad. Why si that?” And why would you do that? You are really something :) I have iPad Pro 9.7 and i can bend this half if i want, so what? One of the most stupidest thing in mobile world is bending tests.. By the way surface is lot thicker than iPad, so of course it needs more force to bend.. what you think would happen with Samsung new galaxy tab 5e, it’s even thinner than iPad.

10. chris2k5

Posts: 258; Member since: Nov 17, 2012

Meanwhile Samsung shares dropped due to exploding batteries and Fold delays.

11. strawberry

Posts: 109; Member since: Feb 20, 2019

Though I don't own iPhone X or XR or going to buy iPad or iMac, I give it to Apple that they really good at what they are doing. If it is not $211 AAPL, I would have bought AAPL shares.

15. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

You should buy, if you have money to invest, because Apple is going to grow more than that.

16. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Every business experiences good times and bad times, but the most important thing is the tendency. Apple is fine and it looks like our learned where and what it should work on.

* Some comments have been hidden, because they don't meet the discussions rules.

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