Apple Q4 2019 earnings: iPhone revenue dips nearly 10%, but wearables come to the rescue
31 October 2019 | 0
With the all-important holiday quarter looming and the launch of the Apple TV+ video-streaming service on tap for Friday, Apple on Wednesday firmly declared that it’s weathering the iPhone downturn just fine.
For its final fiscal quarter of 2019, Apple posted revenue of $64 billion, an increase of 2 percent from the year-ago quarter and representing the upper end of its guidance, and quarterly earnings per diluted share of $3.03, blowing away estimates.
The quarter ended 28 September, so it includes a couple of weeks of iPhone 11 sales. Even so, iPhone sales were down roughly $3 billion, or nearly 10% over the same quarter last year. The same goes Macs sales, which were down about 5%.
Apple CEO Tim Cook pointed out that the iPhone 11 is off to a “very good start” and noted that the revenue loss represented an uptick over the 15% loss it saw earlier in the year. Additionally, Apple said the iPhone active installed base grew to all-time highs in all geographical segments, suggesting people aren’t switching, but rather holding onto their older phones longer.
However, everything else is up. Way up. iPad sales are booming, posting $4.7 billion in sales for an 8% increase, while services (which doesn’t include Apple TV+ yet), were up around 20% at $12.5 billion.
But the big winning category was wearables, home devices and accessories, which includes Apple Watch, AirPods, and HomePod. That category was up more than 50% ($6.5 billion) and is now nearly as big as tablet sales. And that’s without the new AirPods Pro, which is looking to be a big Christmas hit based on early sales and reviews.
The results represent Apple’s best Q4 on record, and next quarter might be even bigger. Apple’s Q1 2020 guidance is between $85.5 billion and $89.5 billion, which would represent an increase over the $84 billion posted in 2019, after cutting its $89 billion to $93 billion forecast in January.
But those days are a distant memory. Apple set new records in the Americas and Asia, and made up some ground in China as well, where the US tariff and trade war is still having a significant effect. Add it all up, and Apple seems poised to get through the holiday quarter – even with flagging iPhone sales – just fine.
IDG News Service