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iPhone sales continue to slide while Apple’s services set an all-time record high in Q2 FY19

Apple has revealed its fiscal 2019 second quarter results and they have posted a revenue of US$58 billion. This marks a 5% drop from the same period last year and the decline mostly came from the iPhone.

Looking at the numbers for the period ending on 30th March 2019, the iPhone had recorded a revenue drop of 17% compared to Q2 FY18 while Mac’s revenue had declined by 5%. On the flip side, the iPad category has posted a 22% increase in revenue and this marks the strongest growth in six years.

On top of that, Apple has also gained a significant 30% increase in revenue for its wearables, Home and Accessories. The Cupertino company has also gotten a bump in services posting a 16% growth. According to Tim Cook ” 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.”

Apple Fiscal 2019 Q2 Results (In million USD)

If we look at the breakdown by regions, Apple had experienced a 22% decline in Greater China. This worrying trend is also seen in the previous quarter. This is followed by the Rest of Asia Pacific where revenue for the last quarter has dropped by 9% compared to the same period last year. Europe is also showing signs of a slowdown as well with a 6% decline.

For the next quarter, Apple is expecting to post revenue between US$52.5 – 54.5 billion which is within the range of last year’s performance. Apple’s Q3 period is often the slowest time of the year and we expect Apple to boost its revenue with the latest iPad Air, iPad mini and 2nd generation AirPods. These devices were introduced in the mid-March 2019 and we expect full global availability in the next quarter.

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Services is clearly Apple’s key focus area. They have recently announced new subscription-based services that cover news and magazine, gaming and video streaming. With a base of 1.4 billion active devices, Apple can upsell its services seamlessly provided it has content users are willing to pay for.

You can read the full report here.

Alexander Wong