Is there anything going that can save Apple from the hole it is in? Falling iPhone unit sales have now given way to falling iPhone revenues, and while the results haven't disappointed Wall Street, that had more to do with low expectations going into the results than it did with the results themselves.
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So what's the quarter been like for Apple? Let's begin with the iPhone.
iPhone revenues of $31.1 billion don't sound that bad until you realize that this is a year-over-year drop of 17%. Apple's been through worse in recent years – Q2 to Q4 2016 was pretty rough, but those were preceded by exceptionally strong quarters – but this drop is happening at a time when iPhone sales are really soggy.
Overall revenues have also hit negative growth with respect to year-on-year growth. Again, Apple has been here before in recent years – again this was Q2 to Q4 2016 – but back then there was confidence that the iPhone would turn things around.
Those days are long gone.
There's another factor that's at play here. China.
The last couple of quarters have seen Greater China year-on-year revenues fall to negative territory. Q1 and Q2 2019 being down 27 and 21 percent respectively.
And again, there's little confidence that the iPhone will come along to fix things.
There is a silver lining. But it's a small, thin one, And it's not enough to offset the storms.
That silver lining is steadily growing services revenues. Revenue from this category – which includes app store sales and digital media – has hit $11.5 billion. And the growth has been pretty stead for years now.
Four years ago, the revenue from this category was $5 billion.
Wearables is also worth keeping an eye on (although Apple bundles these in with home and accessory products). Growth is there for sure, but a billion plus change over a year is little more than rounding for Apple.
Apple is massively reliant on the iPhone, and iPhone sales – and revenues – are floundering.
"What about the iPad?" I hear you ask. "Is that product on the up again?"
Yes, but this seems to be transient, related more to the recent hardware upgrades. And revenue from that category is less than what Macs and the wearables, home, and accessories categories generate.
Bottom line is that nothing is growing at a pace to keep up with the rate iPhone revenues are falling.
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