(Reuters) – Apple Inc’s (AAPL.O) iPhone sales dropped to less than one-half of the sales revenue generated per quarter and for the first time in seven years, but CEO Tim Cook on Tuesday described the change of success is to diversify away from a single product, and the forecast results above Wall Street’s targets.
This strategy turned out to be especially beneficial in China, the world’s largest smartphone market. Investors ‘ fear with a drumbeat of negative transfer of data from the Chinese government, and analysts and that meant trouble for the iPhone maker.
Apple’s greater China sales, which had been in a near free-fall earlier in the year, dipped only slightly, assuaging concerns that the market tension against Apple in one of its most important markets. The shares rose 4.25% in after hours.
Dying person’s world-wide sales of cell phones have caused Apple to focus on the accessories such as the Apple Watch and the growth of the music, films, apps, games, videos, and a credit card in the month of August. In mainland China, Cook said, and the total number of Apple device users has grown, in the fiscal third quarter, which will help to expand the market for its services, the turnover grew by more than 10% of it.
“We actually grew up in the mainland of China,” Cook told Reuters. “The non-iPhone revenue increased by 17%. We are growing in every category, the exterior of the iPhone.”
But on a global scale, the iPhone sales fell by 12% to $25.99 billion, after dropping 17% in the previous quarter and matched Wall Street’s targets.
Image: iPhone, fade – tmsnrt.rs/2yAEoCh
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Wearables and accessories sales grew by nearly 50%, topping expectations.
Sales of Services increased 12.6% to $11.46 billion, up slowing down and missing out on their expectations, but set a new all-time high.
Apple said that it expects revenue for the current fiscal fourth quarter to between $61 billion and $64 billion, which compares to the analyst estimate of $61.02 billion. At the end of the company’s expected range, it would be in the sales to beat the previous year’s $62.90 billion in sales, in spite of the fact that analysts had expected, continued lackluster iPhone sales, up to 5G models by the year 2020.
For the fiscal third quarter, which ended in June, Apple reported a 1% rise in revenue to $53.8 billion and a 7% decline in earnings per share to $2.18, compared with expectations of $ 53.39 million and $2.10 per share, in accordance with Refinitiv of the data.
Hal Eddins, chief economist for the Apple and is a shareholder of Capital Investment Counsel, said he was pleasantly surprised to find out that the iPhone sales is dropping slowly, down compared with the previous quarter.
“You don’t really hear people talking on their phones, as they did a few years ago,” Eddins said. However, “the key to this is that if people are willing to spend on a phone, and they do it with an Apple product.”
Apple did not give the number of active devices made by Apple, but in January it said it had 1.4 billion, and 900 million of those iPhones. Investors ‘ use of the song, which is called the ‘installed base’, as a proxy for the number of subscribers to its services in the private sector. Mr Cook told investors on a conference call on Tuesday, Apple has 420 million paid subscribers to its own services and for third-party apps. The company has set a target of 500 million by the year 2020.
FILE PHOTO: The Apple logo will appear on the stage, before a product unveiling event at Apple headquarters in Cupertino, california October 4, 2011. REUTERS/Robert Galbraith/File Photo
A trip to Miller, a managing partner of Apple shareholder in Gullane Capital ners, said that he would like to see in services for growth and a return to the 20% range, and you think that Apple needs to be in the billions of dollars worth of cash, to buy the media in order to fuel the future of tv service.
“You have to have a larger installed base, and services, that people will get value from it,” says Miller.
THE TRADE TENSION STILL LOOMS LARGE
Apple reported results for the U.S. and Chinese trade negotiators have resumed off-and-on talks. The US President when He suspended the new rates to a permanent $300 billion of Chinese imports, including the iphone.
The trade tension is reduced and economic growth in China, a crucial market for Apple, which has effectively cut the iPhone prices in China earlier this year after the currency exchange, rates could have been made of her phone is too expensive for many Chinese consumers.
Apple’s market share in China has fallen to 5.8% from 6.4%, according to market research firm Canalys, in part because of the smartphone’s rival, Huawei Technologies Co., Ltd market share of the top handset seller in the country.
But Apple’s experience in a smaller and smaller share of the market to eliminate other competitors, such as Xiaomi Corp. (to 1810.HK), Oppo and Vivo, according to the Canalys data. Cook said that the iPhone price changes, and the Chinese government’s move to cut the telephone tax so that the iPhone’s sales in China, has served to erode further.
“Our trade-in and financing programs are doing extremely well in China,” Cook told Reuters. “Because of the active installed base is growing in China, and our services, we are doing very well, growing at double-digit rates.”
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Apple shares have gained more than 20% since the beginning of June, when the shares fell on the news that the U.S. Department of Justice had the competence to decide on the company as a potential probe as part of a wider review of the question of whether the technology giants to engage in anti-competitive practices.
Apple said that sales of its “Wearables, and home accessories segment includes devices such as the Apple Watch, and the AirPods was $ 5.53 billion, compared with the analyst estimate of $4.81 billion.
Apple said it returned more than $21 billion to shareholders over the course of the third quarter, including $17 billion worth of shares are bought back. It declared a dividend of 77 cents per share.
Report by Stephen Nellis in San Francisco; Editing by Peter Henderson and Lisa Shumaker