The iPhone, Apple’s concept of wedding the functionalities of their earlier iPod and iPad devices to a smartphone, has been for several years, the primary offering of the tech giant’s products. It should be no surprise due to iPhone sales once generating a majority of Apple’s revenue. But that might be in the past now.
On Tuesday, July 30, Apple reported their third-quarter fiscal earnings for 2019, and for the first time since seven years ago, less than half of that business was generated by iPhones.
It should be recalled that the first iPhone was introduced in 2007. After a long time, the share of sales earnings has shifted.
From 60 percent to 48 percent
According to Apple’s Q3 2019 fiscal report, they earned revenue of $53.8 billion from April to June this year, plus $2.18 earned from their shares. From that, reports “The Verge,” the sale of iPhones only contributed $25.99 billion or just 48% of the total. Compare the amount to the same quarter in 2018, which was $29.47 billion or 60% of Q3 2018. The last time iPhone revenue gave less than 50% earning to Apple was in 2012, just five years after the debut of the iPhone 1.
That was the turning point in Apple’s iPhone focus, but not anymore.
The reason for the reduction of iPhone's share in its manufacturer’s revenue is a shift in trends. Apple has once again begun to diversify its offerings for consumers, putting just as much focus on services as they already have on products. And to think that their major online service additions have not even launched yet. But for the App Store, Apple Music and so on, they could already make $11.46 billion by themselves. Just imagine how much more they will make when Apple TV+ and Apple Arcade launch later on.
Services are the new Apple priority
CNBC adds that from the aforementioned figures, Apple CEO Tim Cook noted during their company earnings call that he was encouraged by how customers took advantage in-store trade-in to get a leg up in replacing their old iPhones with newer releases.
Unlike before however, Cook did not provide any numbers on current iPhone users. It is just as well, considering their new priority is to promote Apple-branded online services more.
With the upcoming TV+ and Arcade platforms, plus Apple Card so close to becoming available, investors are keeping a close eye on whether this gamble on diversity that the tech giant is undertaking will grow in worth enough to be supported. For now, however, iPhones do not seem to be the be-all and end-all of quarterly revenue earnings for Apple. It might change again when the iPhone 11 series debuts. Other sectors that Apple’s Q3 2019 earnings draw from include wearable gadgets like AirPods, or big devices like the new Mac Pro computer with its famous “cheese-grater” aesthetic.