Apple Services Revenue Hits $11.5bn in Q2 2019

Apple posted its Q2 2019 financial results on April 30 and reported quarterly revenue of $58 billion, a year-on-year decline of 5%. The’s company’s Services revenue hit an all-time high of $11.5 bn however, up from $9.9 bn at the end of Q2 2018. While the company hasn’t broken down the number of subscriptions it currently has for each of its services, it was revealed in Apple’s earnings call that it has 390 million in total, with this number forecast to hit 500 m by 2020. Other highlights from Apple’s Q2 2019 results include sales of ‘Wearables, Home and Accessories’, which earned the company a record $5.1 bn, up from $4 bn in Q2 2018. Sales from iPhones fell from $37.6 bn in Q2 2018 to $31 bn in Q2 2019. Total product sales including iPhone, Mac, Pad, Wearables, Home and Accessories, and Services dipped to $58bn, compared to $61.1bn in Q2 2018. Looking at geographic sales figures for Apple, it was only the Americas and Japan that saw increases, with sales in Greater China seeing the biggest year-on-year decline, ending the quarter on $10 bn, compared to $13 bn in Q2 2018.

Apple’s CEO Tim Cook, said,“Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record,” “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. “We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.” Luca Maestri, Apple’s CFO also added,“We generated operating cash flow of $11.2 billion in the March quarter and continued to make significant investments in all areas of our business. “We also returned over $27 billion to shareholders through share repurchases and dividends. Given our confidence in Apple’s future and the value we see in our stock, our Board has authorized an additional $75 billion for share repurchases. “We are also raising our quarterly dividend for the seventh time in less than seven years.”

Loudest take : Even as Apple loses its momentum with its most popular product- the iPhone, the company has realized that the buck lies in the ecosystem of services which it provides. The focus on services and adjacent devices has increased and the revenues have slowly started to reflect that prominently year-on-year.