On 26 July, Apple posted second quarter results, revealing that things have only gotten worse.
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As iPhone sales level off, Apple is attempting to use such services to wring more revenue out of its existing base of users.
The success of those devices does create a slight dichotomy for game developers as neither Apple’s most powerful, premium-priced tablet or its economy-priced phone can sufficiently rewrite expectations for developing games for iOS.
Reporting its 2016 third quarter earnings, Apple announced it had sold 40.4 million iPhones compared to 47.5 million last year (-15 per cent), 4.3 million Macs compared to 4.8 million last year (-10.5 per cent) and 10 million iPads compared to 10.9 million last year (-8.3 per cent).
As Apple prepares for its next major product launch this fall, the company continues to draw an increasing share of its revenues from services, rather than from sales of devices like the iPhone and iPad. Apple’s revenue from US sales fell 11 percent in the quarter to $18 billion from $20.2 billion one year ago, while its revenue in China dropped 33 percent to $8.8 billion from $13.2 billion in the third quarter of 2015.
For Apple this is good business as it is recurring and linked to its installed base, the CFO said.
The service is also available in nine other countries, and more than half of Apple Pay transactions now originate from non-US markets, Cook added, according to a transcript from Seeking Alpha.
Analysts surveyed by S&P Global Market Intelligence had expected $1.38 earnings per share in the recently-completed quarter on sales of $42.1 billion. And a modestly better forecast for the current quarter sent Apple shares up almost 7 percent in late trading, after closing at $96.63.
But not everything was doom and gloom for Apple in the second quarter. Apple was able to beat these estimates, but only by a narrow margin.
Meanwhile, Apple has pushed hard to make services a meaningful part of its business. The company’s services segment saw revenue growth, with a 19-per cent uptick to $6 billion.
That trend might change in September, when Apple is expected to unfurl a new model, iPhone 7. But some analysts are warning of tepid sales even then, citing industry rumors that Apple may wait until 2017, the tenth anniversary of the iPhone’s release, before making dramatic improvements to its signature smartphone.
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Maestri confirmed Apple sold fewer watches, but he said a recent report by research firm IDC, which estimated Apple Watch shipments fell 55 percent, was “not in the ballpark”.
