Tim Cook: Apple Saw ‘Great Improvement’ in China in Q3 2019

Thanks to trade-in programs and other promotions, Apple saw significant improvement in iPhone sales in China, Apple CEO Tim Cook said today during today's earnings call covering the third fiscal quarter of 2019.

Cook said that Apple saw "great improvement" in China, returning to growth in constant currency in Greater China with improvements in year-over-year iPhone performance compared to the last two quarters.

We're happy with our performance across the board, including a return to growth in mainland China. We accomplished this despite strong headwinds from foreign exchange, which impacted the top-line growth rate by 300 points compared to a year ago, equivalent to $1.5 billion of revenue. In constant currency, our revenue grew in all five of our geographic segments.
Cook went on to say that Apple is "encouraged" by the results of the initiatives it launched earlier this year, with the company seeing a strong customer response to in0store trade-in and financing programs. iPhone in retail and online stores returned to growth on a year-over-year basis in June, said Cook, and the active installed base of iPhone users reached a new all-time high.

Despite the improvements, iPhone revenue was down during the quarter. The iPhone brought in $26 million, down from $29.5 billion in the third quarter of 2018. For the first time, the iPhone was responsible for less than half of Apple's revenue, with services and wearables making up for the decline in sales.

Cook said that later this year, Apple has "several new products" that it can't wait to share with customers, without going into details. Apple also has multiple services on the horizon, including Apple Card (coming in August), Apple Arcade, and Apple TV+.


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Apple’s Services Revenue Hits New All-Time High of $11.46 Billion

Apple's services category, which includes iTunes, the App Store, the Mac App Store, Apple Music, Apple Pay, AppleCare, and more, has become an important revenue driver for Apple amid stagnating iPhone sales, leading Apple to focus more effort on its services category.

In the third fiscal quarter of 2019, Apple's services segment brought in $11.46 billion, up from $10.17 billion in the year-ago quarter and $11.45 billion in the second quarter of 2019.


Apple set new all-time records for AppleCare, Apple Music, App Store search ads, and more, along with a new third-quarter revenue record for the App Store. Apple saw double digit services revenue in all five geographical segments.

Apple surpassed 420 million paid subscribers in the third quarter, and Apple CEO Tim Cook said that Apple is well on its way to reaching its goal of reaching $14 billion in services revenue per quarter by 2020.

Apple Pay is now in 47 markets and in the June quarter, started adding more new users than PayPal and monthly transaction volume is growing 4x as fast. Apple is starting to roll out NYC transit support for Apple Pay in the United States, and Chicago will follow later this year.

Apple in March announced new services that will continue to boost services revenue in the future. Apple News+, a $9.99 per month service that provides unlimited access to more than 200 magazines, has already launched, and later this year Apple is introducing Apple Arcade, Apple TV+, and a new Apple Card credit card.


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Apple Reports Q3 2019 Results: $10B Profit on $53.8B Revenue, Highest June Quarter Revenue Ever [Live Blog]

Apple today announced financial results for the third fiscal quarter of 2019, which corresponds to the second calendar quarter of the year. For the quarter, Apple posted revenue of $53.8 billion and net quarterly profit of $10.0 billion, or $2.18 per diluted share, compared to revenue of $53.3 billion and net quarterly profit of $11.5 billion, or $2.34 per diluted share, in the year-ago quarter.

The revenue figure was Apple's highest ever for the June quarter, just beating out the year-ago quarter, although profits dipped on lower margins.

Gross margin for the quarter was 37.6 percent compared to 38.3 percent in the year-ago quarter, with international sales accounting for 59 percent of revenue. Apple also declared a quarterly dividend payment of $0.77 per share, payable on August 15 to shareholders of record as of August 12.


This is the third quarter since Apple changed the way it reports its results, with the company no longer providing unit sales data for iPhone, iPad, and Mac. As a result, Apple is only providing revenue figures for its various segments, leaving analysts to estimate unit sales based on their own calculations.
“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. “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.”
Apple's guidance for the fourth quarter of fiscal 2019 includes expected revenue of $61–64 billion and gross margin between 37 and 37.5 percent.


Apple will provide live streaming of its fiscal Q3 2019 financial results conference call at 2:00 p.m. Pacific, and MacRumors will update this story with coverage of the conference call highlights.

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Apple Pay Coming to NYC Transit System in Early Summer

Apple CEO Tim Cook today shared some details on upcoming Apple Pay providers during Apple's earnings call covering the second fiscal quarter of 2019.

Ticketmaster is set to begin accepting Apple Pay for ticket purchases on the web in the near future, and more than 50 entertainment and sporting event venues are launching contactless tickets this year, including most NFL stadiums.


New York's MTA transit system is piloting Apple Pay on a couple of lines at the current time, and Cook says Apple Pay will roll out to the rest of the lines in "early summer," which is new information.

Cook believes the introduction of Apple Pay support for transit systems across the U.S. will bring in even more Apple Pay customers who don't currently use the payments service.

Apple Pay transaction more than doubled year over year, and Apple is on track to reach 10 billion transactions in 2019. Apple Pay is available in 30 markets, which Apple expects to expand to 40 markets by the end of the year.

Related Roundup: Apple Pay

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Apple’s Wearables, Home and Accessories Category Sets New Q2 Revenue Record of $5.1 Billion

Apple CFO Luca Maestri today said that Apple's Wearables, Home, and Accessories category, which includes devices like the AirPods and the Apple Watch, set a new March quarter revenue record of $5.1 billion.

According to Maestri, AirPods demands continues to be "off the charts," while earlier in the call, Apple CEO Tim Cook said AirPods are a "cultural phenomenon."


As for Apple Watch, it continues to be the best selling smart watch in the world, with three quarters of Apple Watch sales during the quarter going to first time Apple Watch owners.

The Apple Watch saw its best quarterly results for a non-holiday quarter, and Apple's wearables business was up close to 50 percent in Q2 2019 and is now the size of a Fortune 200 company.


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Apple Sees All-Time Record Response to New iPhone Trade-In Initiatives

During today's earnings call for the second fiscal quarter of 2019 (first calendar quarter), Apple CEO Tim Cook said that Apple's iPhone trade-in efforts have been highly successful.

According to Cook, Apple saw an all-time record response to the company's trade-in promotions, and Apple saw more than four times the number of trade-ins from the year-ago quarter.


When asked which devices people are trading in, Cook said that it's "all over the place." iPhone 6, 6 Plus, 7, 7 Plus, and fewer 8 and 8 Plus models. Some customers, he says, are on a two-year upgrade cycle, some on a one-year upgrade cycle, and some on three or four year cycles.

Cook said that Apple is aiming to offer better than average trade-in values to provide "extra benefits" to iPhone users.
In our stores we offer a trade-in value that is more than the blue book of the device, for lack of a better description. And so we have topped those up to provide extra benefit to the user.
Apple in November began offering a limited-time promotion that provided up to $100 in additional credit when trading in an iPhone. The program allowed customers to buy a new iPhone XR, XS, or XS Max at a more heavily discounted price when trading in an older device.

Apple is no longer running that specific program, but the trade-in page continues to promote new iPhone pricing that's available when trading in an old iPhone and Apple's prices are better than most other trade-in programs for the iPhone.


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Apple Sees Strongest iPad Growth in Six Years in Q2 2019

Amid declining iPhone sales, Apple today said in its Q2 2019 earnings report that the iPad saw its strongest growth in six years.

Apple's iPad sales hit $4.9 billion in Q2 2019, up from $4 billion in the year-ago quarter, marking a 22 percent increase in revenue.


Apple in October 2018 introduced all new iPad Pro models that eschew the Touch ID Home button in favor of a Face ID biometric system, allowing for a larger display area.

In March, Apple added to its iPad lineup with a new $499 iPad Air option, which serves as a middle tier offering between the iPad Pro and the $329 sixth-generation iPad.

Apple also introduced a new version of the iPad mini, marking the 7.9-inch tablet's first update in several years. Both the iPad Air and the iPad mini 5 support the Apple Pencil, enabling Apple Pencil integration across Apple's entire iPad lineup.


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Apple’s Services Revenue Hits New All-Time High of $11.5 Billion in Q2 2019

Apple's services category, which includes iTunes, the App Store, the Mac App Store, Apple Music, Apple Pay, and AppleCare, has become an increasingly important revenue driver for Apple amid stagnating iPhone sales, and Apple has been focusing more than ever on its services category.

During the second fiscal quarter of 2019, Apple's services segment brought in $11.5 billion in revenue, up from the $9.9 billion services earned in the second quarter of 2018. Apple set a new all-time record for services revenue this quarter.


Apple in March announced a slew of new services that will boost services revenue even higher in the future. Apple News+, a $9.99 per month service that provides unlimited access to more than 200 magazines, has already launched, and later this year Apple is introducing Apple Arcade, Apple News+, and a new Apple Card credit card.

Apple has said that it is aiming to reach $14 billion in services revenue per quarter by 2020, and the company is well on its way to reaching that goal.


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Apple CEO Tim Cook Says Performance in China Has Improved Over Previous Quarter

Apple today announced its earnings results for the second fiscal quarter (first calendar quarter) of 2019, and ahead of the company's upcoming earnings call, Apple CEO Tim Cook shared some remarks on Apple's results with CNBC.

According to Cook, Apple's performance in China improved over the previous quarter and saw greater strength towards the end of the quarter.


A sales tax cut in the country decreased the price of Apple products, and Apple also made its own pricing adjustments in the country. Cook also told CNBC that the trade relationship between the U.S. and China had improved, resulting in a "much better" tone.
"The tone is much better than it was in the November-December timeframe. I think that affects consumer confidence in a very positive way," Cook said.
Apple had $10.22 billion in sales in its Greater China category, which includes Taiwan and Hong Kong.

During the quarterly earnings call, Cook said that while worldwide revenue was down 17 percent, declines were smaller in the final weeks of the March quarter. Apple says that November and December were the most challenging months, which is an encouraging trend.

Apple reported revenue of $58.02 billion and earnings per share of $2.46. Apple's guidance for the third fiscal quarter of 2019 is $52.5 to $54.5 billion, higher than analyst expectations and an indication that iPhone sales in China are stabilizing.


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Apple Reports 2Q 2019 Results: $11.56B Profit on $58B Revenue as Services Revenue Hits All-Time High

Apple today announced financial results for the second fiscal quarter of 2019, which corresponds to the first calendar quarter of the year.

For the quarter, Apple posted revenue of $58.0 billion and net quarterly profit of $11.6 billion, or $2.46 per diluted share, compared to revenue of $61.1 billion and net quarterly profit of $13.8 billion, or $2.73 per diluted share, in the year-ago quarter.

Gross margin for the quarter was 37.6 percent, compared to 38.3 percent in the year-ago quarter, with international sales accounting for 61 percent of revenue. Apple also declared an increased quarterly dividend payment of $0.77 per share, up from $0.73. The dividend is payable on May 16 to shareholders of record as of May 13.

In addition to the increase in the dividend payment, Apple says it has authorized another $75 billion for share repurchases.


This is the second quarter since Apple changed the way it reports its results, with the company no longer providing unit sales data for iPhone, iPad, and Mac. As a result, Apple is only providing revenue figures for its various segments, leaving analysts to estimate unit sales based on their own calculations.
“Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record,” said Tim Cook, Apple’s CEO. “We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”
Apple's guidance for the third quarter of fiscal 2019 includes expected revenue of $52.5-54.5 billion and gross margin between 37 and 38 percent.


Apple will provide live streaming of its fiscal Q2 2019 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

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