Apple shares turn green as services rise
Apple’s booming revenue in its services division provided a boon to investors tonight, as shares bounced more than four per cent in after-hours trading.
The Californian tech giant topped expectations for quarterly profit and revenue for the three months to the end of June, as performance improvement in China helped its results.
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Services revenue, which includes its App Store, Apple Music and Apple Care, rose 12.6 per cent to $11.5bn (£9.5bn). It reached its highest proportion of Apple’s overall sales to date, at 21 per cent.
Sales of the iPhone fell 13 per cent year-on-year in line with estimates, as users opted to stick with their current phones rather than upgrade.
Apple boss Tim Cook told Reuter: “The fact that people are hanging onto [their iPhones] a little longer, it’s not something I worry about in the 90-day clock.”
“The most important thing for us is that we continue to grow the installed base.”
Performance in China grew in every category outside of the iPhone, overcoming consumers’ sluggish spending. It followed a decision by Apple to cut iPhone prices in the region, as currency exchange rates made its phones too expensive for shoppers.
Overall profit fell seven per cent as earnings per share reached $2.18, surpassing estimates of $2.10 per share. Revenue rose one per cent to $53.8bn, beating expectations of $53.4bn.
Sales in its wearables category, which includes the Apple Watch and Airpods, beat estimates of $4.8bn to reach $5.5bn in the period.
Cook said Apple hopes to launch its first foray into financial services, its Goldman Sachs-backed credit card, next month.
“Apple has been scrutinised consistently to see how it is faring in a post-Jobs, and now a post-Ive, world, specifically on whether the next generation of talent can match – or even surpass – the level of creativity they achieved,” said Jim Prior, global chief of WPP brand agency Superunion, in reference to the passing of its founder Steve Jobs and recent resignation of its chief designer Jony Ive.
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“In response to this scrutiny, the business made a statement that it would not be solely relying on its tech products… It remains to be seen whether this strategy provides sufficient long-term business compensation for the innovative flair they have obviously lost.”
Main image credit: Getty