So will Apple and its iPhone save the market?
Apple’s sales growth continued to accelerate in the three months to June thanks to stronger than expected sales of its flagship iPhone (especially the costly X model) and sharply higher revenue from services (iTunes etc).
Apple revealed a 17% year-on-year increase in overall revenues to $US53.3 billion for its third quarter ending June 30.
Earning jumped 32% to $US 11.5 billion, helping Apple shares to rise 3% in after hours trading.
The quarterly report was much better than those from Netflix and Facebook and around the solid level of other megatechs, Microsoft, Alphabet (Google) and Amazon.
Sales of iPhone rose by just 1% to 41.3 million but thanks to the more expensive X iPhone selling prices leapt 20% to $US29.9 billion.
Apple said that as usual the reported unit sales do not include another 3.5 million iPhones that were already in the retail channel and were sold to consumers during the quarter. The iPhone X was the most popular model.
The company said its services revenues, which include the App Store, iCloud and Music, jumped 3%1 to $US9.5 billion. Its cloud computing business saw a 50% jump in revenues in the quarter from a year ago and Apple Music also saw a more than 50% rise
While the result was better than analyst forecasts, it included a one-time boost from $US236 million related to the resolution of lawsuits in Apple’s favour.
Apple’s guidance for the coming quarter also came in just ahead of analysts’ forecasts, with revenues of $US60 billion to $US62 billion, suggesting a return to the usual September iPhone launch schedule.
Apple’s wearables business, which includes Apple Watch and AirPods, saw 60% revenue growth in the quarter, bringing its total sales of these products over the last four quarters to more than $US10 billion.
The Americas and China had the biggest year-over-year gains, at 20% and 19% respectively. Americas had smallest sequential decline (from the previous quarter) at 1%, while China fell 27%, behind only Japan’s 29% fall.
Apple returned $US25 billion to shareholders in the quarter, including $US20 billion in share buybacks, reducing its net cash to $US129 billion at the end of June.
