Apple's services are making more money than ever

Apple's services are making more money than ever

Apple's services are making more money than ever

Apple is continuing to grapple with challenges it hasn't had to confront since iPhone debuted 12 years ago, catapulting the company on to a head-spinning trajectory.

Apple's iPhone sales continued to slip in its latest quarter, but results were still ahead of Wall Street's expectations. The company posted revenue of $58 billion. Global sales accounted for 61 percent of the quarter's revenue. It didn't take too long after that, though, for the China situation to grow dire, culminating in an unheard-of investor update about weak iPhone sales and dramatic dip in first-quarter revenue - the last time that happened was in the winter of 2000.

Overall, Apple earned $58.02 billion in the quarter, down more than $3 billion from the same quarter a year ago.

Wearables include the Airpods wireless headphones and the Apple Watch. Since it's not selling customers phones as often, Apple has made a decision to charge more for each device, a move that's helped prop up the iPhone business despite lighter demand. "We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services".

"I imagine people are extrapolating the positive developments in China near quarter end and looking forward to a better environment there", said Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel.

Meanwhile, sales in Greater China are expected to come in at $12.07 billion, which would mark a roughly 7.3% decline from Q2 2018.

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That's according to market research firm CIRP (the Consumer Intelligence Research Partners), which gathered data showing that from January 1, 2019, until the end of March, the iPhone XR was responsible for 38 per cent of all iPhones sold in the U.S. Apple adjusted the prices of iPhones, and the Chinese government reduced sales taxes, which spurred more sales.

That's because, for the second quarter in a row, the iPhone XR remains the best-selling phone Apple makes. "Our trade-in and financing programs that we implemented in our retail stores have been very well-received there".

"There's an improved trade dialogue between the US and China, and from our point of view, this has affected consumer confidence on the ground there in a positive way", Cook added. The company unveiled a trio of new subscription services related to television, news and games in March.

Apple's sales are still shrinking amid weakening iPhone demand, despite the company's increasing emphasis on services created to bring in a steady flow of money from the 1.4 billion of its devices still in use. Apple has had a goal of reaching $50 billion in Services revenue, which would double the $25 billion it took in during fiscal 2016. Apple Arcade and Apple TV+ will launch this fall. Apple also said it would spend an extra $75bn on share buybacks. The card will be closely linked to Apple Pay, for those who sign up, and promises to eliminate the high interest rates and shady fees other credit card companies impose. Apple had 390 million paid subscriptions during the three months.

Services revenue wasn't the only strong point in Apple's smaller business lines.

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