Apple Delivers Blockbuster Quarter Despite Slow iPhone Sales

Saturday, 01 Aug, 2020

During Thursday's Q3 2020 earnings call, Apple CEO Tim Cook summed up how COVID-19 affected sales of the company's various products.

Revenue from iPhone sales totaled $26.4 billion during the quarter, up 2% annually.

The continued growth in services and accessories also showed the durability of the company's brand, which has prompted investors to view it as a comparative safe haven and pushed up share prices since March. But the region returned to growth in the June quarter and registered $9.3 billion in revenue, up 2% year over year.

For some time now we've been hearing rumors about a delay this year in the start of shipments of the upcoming iPhone 12 family, compared to Apple's past release timelines. Apple also announced its plans to give investors three additional shares of Apple per share already owned at the end of August as part of a 4-1 stock split. This marks the company's fifth stock split followed by the one occurred in 2014.

Services, which includes the App Store, Apple Music and iCloud subscriptions, generated sales of US$13.2 billion, up from US$11.5 billion a year ago and roughly in line with Wall Street expectations.

Services revenue rose nearly 15% to $13.2 billion over last year's $11.45 billion.

Cook told Reuters that Apple has 550 million paying subscribers on its platform, up from 515 in the previous quarter.

Wearables grew from $5.5 billion to $6.45 billion. Because of the uncertain economic climate, Apple once again declined to offer detailed guidance for the coming quarter.

Meanwhile, Mac sales saw an uptick of 22 percent in revenue year-over-year, while iPad sales were up 31 percent - marking the highest quarter revenue for the product category that Apple has seen in eight years.

The pandemic likely boosted iPad and Mac sales due to lockdown rules and an increase in remote learning, while Apple store closures are weighing on iPhone sales, the CEO said in an interview with Bloomberg TV.

The tech giant expects Q4 to see the same trends as the June quarter with the exception of Apple Care.