Dan Pražák Apple announced financial results for the second fiscal quarter of 2019, i.e. for the period from January to March of this year. Year-on-year, the company recorded a decrease in sales and net profit. iPhones in particular did not fare well, sales of which dropped significantly. On the contrary, services, sales of iPads and other products in the form of Apple Watch and AirPods improved.
During Q2 2019, Apple reported revenues of $58 billion on net income of $11,6 billion. For the same period last year, the company's revenue was $61,1 billion and net profit was $13,8 billion. Year-on-year, this is a 9,5% decrease in revenue, but despite this, Q2 2019 represents the third most profitable second quarter of the year in the entire history of Apple.
Tim Cook's statement:
“The results for the March quarter show how strong our user base is with more than 1,4 billion active devices. Thanks to this, we recorded record revenues in the area of services, and categories focused on wearables, home and accessories also became a driving force. We also set a record for the strongest iPad sales in six years, and we're excited about the products, software and services we're building. We look forward to working with developers and customers at the 30th Worldwide Developers Conference in June.”
iPhone sales fell significantly, iPads and services did well
For the second time in a row, Apple did not announce the number of units sold for iPhones, iPads and Macs. Until recently, it did so, but when announcing the financial results for the last fiscal quarter of last year, the company let it be known that the units sold of individual devices were not an accurate indicator of the success and basic strength of the business. But critics have countered that it's just an attempt to hide even higher returns on more expensive iPhones that might not actually have such a high-end price tag.
However, in the case of iPhones, statistics regarding the number of units sold are still available. Based on the latest report from the analyst company IDC Apple sold approximately 36,4 million iPhones in the second fiscal quarter of this year. Compared to 59,1 million in Q2 2018, this is a significant year-on-year decrease of 30,2%, which, among other things, caused Apple to fall to third place in the ranking of the most successful smartphone manufacturers worldwide. The second place was occupied by the Chinese giant Huawei, which grew by an incredible 50% year-on-year.
Sales of iPhones were particularly affected by the unfavorable situation in China, where the Californian company experienced a large outflow of customers who preferred to reach for the phone of a competing brand. Apple is trying to regain lost market share with various promotions and discounts on the latest iPhone XS, XS Max and XR.
In contrast, iPads experienced the biggest growth in sales in the last six years, namely by 22%. The success can be attributed mainly to the new iPad Pro, the introduction of the updated iPad mini and iPad Air also played a partial role, but the sales of which contributed only partially to the results.
Services such as iCloud, the App Store, Apple Music, Apple Pay and the new Apple News+ were extremely successful. Of those, Apple took the highest ever revenue of $11,5 billion, which is $1,5 billion more than in the second quarter of last year. With the arrival of Apple TV+, Apple Card and Apple Arcade, this segment will become even more important and profitable for Apple.
I wouldn't see it as black at all. On the contrary, it seems like a great success to me. The iPhone is currently something like the Dacia of cars in phones. But price wise it's a Bentley. How much would Dacia sell like this? Neither. But Apple is able to sell its mix of backward system and prehistoric hardware by the millions. Bravo Cook! Well done Apple!
You described the situation quite well.