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Today, Apple has released its second quarter financial results to shareholders. After a tumultuous first quarter in which Chief Executive Officer Tim Cook revised the company's forecast several weeks before the earnings report was released, investors and analysts were looking for Apple to share good news, including news stories. iPhone sales, service activities and the situation in China. .
Apple has somewhat met these expectations, but overall, its earnings report for the second quarter of 2019 is mixed. The company generated $ 58 billion in sales in the quarter, which is at the top of its expected revenue range ($ 55 to $ 59 billion), but declining 5% over one year. Of this total amount, iPhone sales amounted to $ 31 billion, compared with $ 37.5 billion for the same quarter in 2018.
Apple's shares jumped more than 4% after the earnings report, pushing the company to a valuation approaching $ 1 trillion.
Manage the decline of the iPhone
Overall, Apple's other product segments performed well this quarter. The iPad sales business turnover has grown from $ 4 billion in Q2 2018 to $ 4.8 billion in Q2 2019. The category of apparel products, household items and accessories is also expected to grow. Apple also grew from $ 3.9 billion in Q2 2018 to $ 5.1 billion this quarter.
Mac sales declined slightly over the previous year. The kitchen attributed this drop to "processor constraints," but the CEO also said that these constraints should not have a long-term effect on Mac sales. However, as expected, Apple's service sector reached a record $ 11.5 billion in revenue this quarter, up from $ 9.8 billion for the same period last year and $ 10.9 billion for the first quarter of 2019.
After years devoted to growing iPhone sales, Cook has described the decline in his iPhone business this quarter as being "significantly lower than last quarter's." Mr Cook pointed out that the most difficult months of recent memory of iPhone sales were November 2018 and December 2018, and that the company's goal is to "speed up the pace" to accelerate iPhone sales in the future.
While users can keep their iPhone longer now, Apple has spoken of the positive and strong response to the reorganization of its clearing and financing programs. After launching new programs in the United States, China, the United Kingdom, Spain, Italy and Australia, Apple recorded a recovery volume four times higher than it had recorded in March 2018 This means that customers are more inclined to buy new iPhones if they can get some of the money by handing over their existing handsets or if they can choose a financing option that suits them.
At the end of last year, Apple had explained that it would not report unit sales of iPhone per quarter, a decision that has frustrated some people but makes sense for the bottom line of Apple. Instead, the company announced in its 2019 first quarter earnings call that its global installation base included 900 million iPhones – and the report on today 's results. hui indicates that the company's installation base includes 1.4 billion devices. Rather than focusing on the number of new iPhones sold, Apple now wants to focus on the number of iPhones in the world to show the breadth of its service activities.
Services and China
Apple hopes that its many new services will attract many iPhone users. At an event in March, the company announced Apple News +, a subscription program to news and magazines. Apple Arcade, a game subscription service; and Apple TV +, a subscription program to streaming TV. The first of three is already available for $ 10 a month, but the last two will make their debut in the fall.
All of these new efforts, along with Apple's existing services, are an important part of the company's future. Cook described "the singularly exceptional experience" that Apple is trying to achieve with its devices and services. The company hopes to retain the users of the Apple ecosystem by offering services similar to those of its hardware: easy to use, meticulous, focused on privacy and security.
The way Apple TV + and Apple Arcade will be received is not clear, but existing Apple services are already reinforcing this effort. At present, Apple has 390 million paid subscriptions on its entire service portfolio, compared with 120 million in the same period last year and 30 million more than the previous quarter. Cook did not break down this number of subscribers, but in the last quarter, Apple Music had 50 million paying subscribers.
With regard to China, the country continues to present difficulties for Apple, which recorded a lower sales figure than last year. This quarter, sales in Greater China generated a business turnover of $ 10.2 billion, down from the total revenue of the second quarter of 2018, which was up to $ 13 billion.
However, Apple's leadership remains optimistic about its efforts in China. Tim Cook again spoke of the popularity of Apple's new conversion and financing options, which have been very successful in China and other countries. Mr. Cook also explained that price adjustments to take into account the weakening of the currency had had a positive effect in the region, as well as the stimulus programs created by local governments and the improvement of the trade dialogue between the United States and China.
Many analysts have questioned Apple about its recent deal with Qualcomm, in which the companies had reached an agreement to dismiss any dispute after just one day of hearing. This agreement resulted in a multi-year supply and license agreement in which Apple will continue to use Qualcomm chips in its devices. Cook did not give more details about the settlement, he only stated that the company was "happy to leave the litigation behind us".
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