People are holding to their old iPhones much longer than usual.
Built with quality and able to withstand time, Apple announced that its profit from selling iPhones was making up less than half of its business. This is the first time since 2012.
But the drop doesn't really affect the company, as it was able compensate the loss from other sales.
At its fiscal Q3 2019 earnings report, the company announced that it earned $53.8 billion in revenue and earnings per share of $2.18. That revenue is a 1 percent jump year over year. iPhone revenue was $25.99 billion compared to $29.47 billion in 2018.
Apple saw an increased revenue from wearables, most notably from sales of the second-generation AirPods. Revenue from Mac sales was $5.82 billion, and iPads were $5.023 billion, up from $4.634 billion in Q3 2018.
CEO Tim Cook said that Apple's revenue from services and wearables/home/accessories divisions combined, is equivalent to the size of a Fortune 50 company.
"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 was once a $1 trillion company, before losing the title. With Apple's strong Q3 2019 results, the company's stock was trading at 4.3 percent higher, benefiting Apple with a slight boost in market cap to $960.6 billion.
Here, Apple is showing how it reversed its previous two quarters that had heightened investor concerns about its iPhone business and exposure to the U.S.-China trade war.
With consumers holding on to their phones longer and upgrading less often, new iPhone launches don’t profit Apple's sales in the same way like they once did.
This is why Apple has put more focus on its consumer services.
For example, the company dedicated an entire event to a range of them back in March. iCloud, the App Store, Apple Music, Apple Pay, and others that are all viewed as crucial to Apple’s future growth and diversification.
Apple's Q4 2019 would draw more attention as it will include sales for the 2019 iPhone lineup.
The company is forecasting Q4 revenues between $61 and $64 billion.
The 2019 iPhones are expected to include more advanced camera technology, with the most premium models surpassing the performance and capabilities of their predecessors, the iPhone XS and XS Max, by margins.
Previously, Apple acquired Intel’s 5G modem business, in a move to help Apple become more self-reliant in producing the chips and technology inside iPhones and cellular iPads.
Cook said the Intel deal, Apple’s largest-ever acquisition in terms of employee count, adheres to the company’s “long-term strategy of owning and controlling the primary technologies behind the products that we make.”
