Apple Services Business Hits All-Time Record to Soften The COVID Impact on The iPhone Sales

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posted on 4 years ago — updated on 1 second ago

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Services such as Apple Music, App Store, iCloud, Apple Arcade and Apple TV+ are raking in record revenues for the company. At the same time, products such as the AirPods, HomePod and accessories for the Apple Watch and the iPad Pro, to name a few, are also doing well.

Apple has announced its Q2 results, and there is the very obvious impact of the COVID pandemic through the quarter. Apple has clocked a quarterly revenue of $58.3 billion, which is an increase of 1 percent from the same quarter last year. International sales have accounted for 62 percent of the total revenue for Apple. This is higher than the $53.8 billion revenue which analysts had expected. A lot of the credit lies at the doorstep of the Services Business, which has clocked an all-time record revenue of $13.3 billion in the quarter.

“Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in Services and a quarterly record for Wearables. In this difficult environment, our users are depending on Apple products in renewed ways to stay connected, informed, creative, and productive,” says Apple CEO Tim Cook.

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The Apple iPhone saw an expected decline in revenue, seeing a drop to $28.96 billion from $31.05 billion in the same quarter last year. It is important to note that these numbers are from the period before the launch of the new and more affordable Apple iPhone SE, which is priced at $399 in many countries and Rs 42,500 in India. Mac sales remain largely stable at $5.3 billion while the iPad sales fell from $4.8 billion to $4.3 billion in the comparative quarters. However, along with services, the wearables, home and accessories categories saw a jump as well—$6.28 billion, up from $5.12 billion in the same quarter in 2019.

This means that services such as Apple Music, App Store, iCloud, Apple Arcade and Apple TV+ are raking in record revenues for the company. At the same time, products such as the AirPods, HomePod and accessories for the Apple Watch and the iPad Pro, to name a few, are also doing well. “Our active installed base of devices reached an all-time high in all of our geographic segments and all major product categories. We also generated operating cash flow of $13.3 billion during the quarter, up $2.2 billion over a year ago,” says Luca Maestri, Apple’s CFO

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Apple has also talked about its contribution to fighting the COVID pandemic. “We feel motivated and inspired to not only keep meeting these needs in innovative ways, but to continue giving back to support the global response, from the tens of millions of face masks and custom-built face shields we’ve sent to medical professionals around the world, to the millions we’ve donated to organizations like Global Citizen and America’s Food Fund,” says Apple CEO Tim Cook. In fact, the recently launched iPhone SE also comes in a (PRODUCT)RED version, and every time one of those is sold anywhere in the world, a part of the money that you pay for it is redirected towards COVID relief, in partnership with the (RED) Foundation.

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Apple is also working with Google in what can be described as an unprecedented partnership, to develop an integrated and cross platform solution for Contact Tracing in an attempt to counter the spread of COVID around the world. Earlier this week, Apple released the new beta for iOS as well as newer tools for developers to test out the contact tracing APIs. Apple has also emphasized the security aspects of these new solutions, confirming that at no point does the list of contacts ever leave your phone, the list of people who you may have come in range with never leaves your phone and at no point is the data shared with the company, even in case of a positive test. Only public health authorities will have access to that data—though Apple and Google will have no say in who these authorities then share the data with.