Apple post record revenue in Q1 FY19 for services, Mac and wearables despite lower iPhone revenue

Earlier this month, Apple revealed that they are expecting lower revenue for its fiscal 2019 first quarter which ends on 29 December 2018. It was quite surprising and it marks the first Q1 revenue decline for Apple since 2001. The quarterly results are finally out and they had posted revenue of US$84.3 billion which is a 5% drop from the same period last year.

Apple had attributed the shortfall to several reasons which include the timing of the latest iPhone release, the discounted battery replacement program and the decline of iPhone sales in China. However, the situation isn’t all doom and gloom as the Cupertino company has shown growth in other areas.

While revenue from iPhone had declined by 15%, revenue from other products and services grew by 19% for the same period. The Mac grew by 9% while wearables, home and accessories grew by a significant 33%.

The iPad category which was fueled by the latest iPad Pro 2018 had also shown growth of 17% in revenue. According to Apple, these three categories had set a new all-time revenue record. Services which covers the App Store, Apple Music and iCloud had also posted revenue growth of 19.13%.

If you look at the breakdown by regions, the biggest shortfall is from China with a decline by 27%. Revenue in Europe and Japan have declined as well but there’s still a slight growth in the Americas and the rest of Asia Pacific.

Interestingly, Apple CEO Tim Cook had earlier mentioned that Malaysia is among several countries that had set a new all-time record despite the challenging quarter. For this new fiscal year, Apple has stopped reporting unit sales for the iPhone, iPad and Mac, so we won’t know exactly how many iPhones were sold in the last three months. The move was perceived as a sign that Apple is expecting to sell fewer units and they are putting more emphasis on revenue as a growth metric.

Many were expecting Apple to continue to post new revenue records especially after releasing its latest range of products. The starting prices for the latest iPhone, Mac and iPad Pro models are much higher than before. For the first time, an iPhone can cost more than RM7,000 for the top of the line iPhone XS Max 512GB while the latest iPad Pro can go as high as RM8,199 for the range-topping 1TB model with 4G LTE support.

Historically, Q1 is Apple’s best performing quarter as it covers the lucrative year end season. Last year’s fiscal Q1 was their best quarter yet with revenue of USD88.3 billion. For the next quarter, Apple expects revenue between US$55-59 billion which is slightly lower than last year’s fiscal 2018 second-quarter revenue of US$61.1 billion.

[ SOURCE ]

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