Apple’s services business hits all-time record and helps lessen coronavirus impact
Apple today reported its second quarter earnings, which showed resilient growth for the company despite the impact the COVID-19 pandemic has had on its supply chain and retail business. Apple posted revenue of $58.3 billion — good for a 1 percent increase over this time last year — and earnings per share of $2.55. Analysts had expected revenue of $53.8 billion and earnings per share of $2.23, according to Bloomberg.
“Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in services and a quarterly record for wearables,” CEO Tim Cook said in a press release. “In this difficult environment, our users are depending on Apple products in renewed ways to stay connected, informed, creative, and productive.
In February, Apple warned investors that it wouldn’t meet its Q2 earnings guidance due to constrained iPhone supply around the globe and decreased demand for its products in China during the height of the outbreak there. Hardware sales were down across the board in Q2 with the exception of wearables, as Cook noted. AirPods and the Apple Watch led that part of Apple’s business to year-over-year growth of 23 percent.
Apple is not providing any Q3 guidance, so the company might be in for a rougher time when those earnings come around this summer.
With most hardware sales down, the company had to be hoping that its services business (which includes Apple TV Plus, Apple Arcade, Apple Music, and more) would be a bright spot this quarter since so many people are spending the bulk of their time at home. And that proved true, with services hitting an all-time record revenue of $13.3 billion. A year ago, that number was at $11.5 billion.
Apple’s retail stores in the United States and elsewhere — with the exception of mainland China and one in South Korea; they’ve already reopened — have been closed since mid-March as health officials continue imploring people to follow social distancing guidelines and reduce density where possible.
The pandemic has not prevented Apple from releasing new products. In recent weeks, we’ve seen a new MacBook Air, iPad Pro (with its Magic Keyboard), and the $399 second-generation iPhone SE make their way to consumers. And the company has said it will hold an online-only version of its annual Worldwide Developers Conference in June, where you can expect to see the next major features coming to iPhone, iPad, Macs, the Apple Watch, Apple TV, and more.
Apple has joined together with Google to create a joint system between Android and iOS that will be utilized for contact tracing in hopes that it can help slow the spread of the virus as some regions begin to lift their stay-at-home orders and restore a sense of normalcy. Developers making apps for health organizations will be able to start using the system in May, with deeper contact tracing set to arrive in iOS and Android as part of upcoming software updates.
Rumors have suggested Apple is facing coronavirus-related manufacturing delays for this year’s iPhone lineup; the company’s first 5G devices might ship later than their usual timeframe after they’re announced this fall.
Apple today reported its second quarter earnings, which showed resilient growth for the company despite the impact the COVID-19 pandemic has had on its supply chain and retail business. Apple posted revenue of $58.3 billion — good for a 1 percent increase over this time last year — and earnings…
