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Apple’s Q3 earnings – record revenues as services shine

Apple has just announced its quarterly earnings for Q3 2019, and there are a few bits worth noting if you like to keep track of how the tech giant’s business is evolving as iPhones sales drop off.

Of course, if you want all the nitty-gritty facts and figures you can check the full press release from Apple – but that’s a pretty dry read, so we’ve plucked out the key takeaways for you.

Perhaps most notable is the fact that this was a record third quarter in terms of revenue, with Apple taking a whopping $52.3bn – that’s just slightly more than it did over the same period last year. But Q3 profits have decreased year-over-year from $11.5bn to $10bn, thanks in part to a 12% decrease in revenue from iPhone sales – Apple’s biggest product by a long way.

After years of steady growth, we’ve known for a while now that iPhone sales were beginning to stagnate. Upgrades aren’t as essential as they used to be, and with devices lasting longer than ever it seems users are happy to stick with older models for longer. Add to that the success of the mid-range iPhone XR, and you can see there are fewer people opting for the very high-end models that garner the most profit.

All that is perhaps slightly concerning if you’re an Apple shareholder, but we consider it a good thing for consumers. Holding onto cheaper devices for longer means we end up paying less, right?

iPhone revenue aside, there are plenty of promising areas of change for Apple. CEO Tim Cook says that Apple’s record revenue was driven by “accelerating growth from Wearables, strong performance from iPad and Mac and significant improvement in iPhone trends.” Plus, Apple is continuing to make inroads into the Chinese market, with its biggest sales ever from that region.

But most important of all Apple’s all-encompassing “services” revenue, which accounted for $11.5bn profit alone this quarter. The App Store broke new sales records, with iTunes, iCloud, and Apple Music contributing a lot to that figure too.

With Apple Arcade and Apple TV+ coming later this year, we expect this revenue stream to continue to grow. In fact, it might not be too long before services make up the majority of Apple’s business.