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Apple Revenues Boosted By Solid iPhone Sales And Revived iPad Demand

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Apple revenues rise 7 percent despite prospect of the new iPhone on the horizon

Apple revenues rose by seven percent over the past three months thanks to solid iPhone sales, despite the prospect of a new iteration being announced in September, and a rise in demand for the iPad.

In a traditionally slow quarter, revenues rose from $42.4 billion (£32bn) to $45.4 billion (£34.3bn), a third of which came from outside the US.

“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” said Apple CEO Tim Cook.

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“We hosted an incredibly successful Worldwide Developers Conference in June, and we’re very excited about the advances in iOS, macOS, watchOS and tvOS coming this fall.”

iPhone sales rose from 40.4 million to 41 million, generating $24.8 billion, while Mac sales were static at 4.3 million, although revenues increase slightly to $5.6 billion.

However iPad sales jumped from 10 million to 11.42 million, a real boost for Apple’s tablet business which has in the past been accused of stagnating. Revenues from the division are now $5 billion. Service revenues, which cover everything from the App Store to Apple Pay, reached a record $7.3 billion (up from $6 billion).

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Apple does not disclose individual figures for the Apple Watch, and instead includes in the ‘Other’ category, which also includes sales of accessories, Apple TV and Beats headphones. Revenue in this segment increased from $2.2 billion to $2.7 billion.

Analysts are encouraged by the performance, aside from increased competition in China, especially ahead of the launch of the next iPhone, which is expected to be the most significant overhaul of the smartphone in recent years.

Recent reports suggest the device could have facial recognition technology for example.

“Apple delivered a solid quarter firmly in line with expectation,” said Geoff Blaber, an analyst with CCS Insight. “All eyes are on the new iPhone product launches and the scope for a later October launch for the flagship. Apple has shown a remarkable ability to manage supply chain and ramp new iPhone models but a delay will add pressure to fulfill pent up demand in the last calendar quarter of the year.

“Apple’s Services business continues to be the shining light. Not only is $7.3 billion in revenue hugely significant in its own right, it underlines the ecosystem advantage it has over its competitors outside of China.

“iPad’s return to growth was a bright spot for the quarter and follows repositioning and significant emphasis on productivity and the enterprise. Maintaining growth won’t be easy but Apple has broken the negative trend and continues to outperform the broader tablet market.”

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