Despite Worst iPhone Sales In Seven Years, Apple Still Made Record Profit In Last Quarter

Apple revealed its quarterly profits for the third fiscal quarter of 2019, and there's some good news and bad news.

The report did hint what seems to be an open secret by now -- a considerable drop in iPhone sales, in fact, less than half of the quarterly revenue. What's more damning is that iPhone sales haven't been this bad since 2012.

Reuters

But here's the odd part: Apple saw a considerable increase in response for Apple services and wearable devices, making a decent overall profit for the previous quarter.

Apple forecasted Q3 earnings revenue between $52.5 billion and $54.5 billion. It actually made $53.8 billion revenue and $10.04 billion profit in the month of April, May and June of 2019. Global sales amounted to 59 percent of its total revenue.

In China, Apple hasn't been doing so good, in the past few quarters as the sales numbers are on a constant drop. However, this quarter Apple has witnessed just a slight drop in one of its most crucial markets.

Tim Cook said in a statement, "This was our biggest June quarter ever - driven by all-time record revenue from Services, accelerating growth from wearables, strong performance from iPad and Mac and significant improvement in iPhone trends," said Tim Cook, Apple's CEO.

Reuters

"These results are promising across all our geographic segments, and we're confident about what's ahead. The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products."

With the drop in iPhone sales globally (a good 12 percent, $25.99 billion after dropping a whopping 17 percent in the previous quarter), Apple has shifted its focus on Apple Watch, while enhancing and bringing in new elements for gaming, music as well as video.

Apple also has revealed that the Apple Credit Card (which got announced at WWDC 2019) that will be launched in August, in collaboration with American Financial Institution Goldman Sachs. Wearables and accessory revenues spiked approximately 50 percent,and exceeding expectations (not really surprising, considering the number of dongles required to use Apple products).

Apple expects the revenue for the upcoming fourth quarter to be around $61 billion and $64 billion.

It isn't news that many iPhone users have been switching sides and coming to the green side. With the device getting more expensive with every iteration (more expensive when you think of buying it in countries like India) reports have revealed that iPhone users are switching to Android. And the upcoming iPhone doesn't look very promising either. So its shift to a services-driven strategy makes sense.