Can Apple's Services Counteract Flagging IPhone Sales?
Zacks Investment Research | Feb 18, 2019 05:33AM ET
Late last month, Apple (NASDAQ:AAPL) released fiscal first-quarter earnings that barely came in above estimates. However, revenues experienced a year-over-year slump, largely due to a slide in iPhone sales. A large part of the softness emanated from a drastic decline in sales in China and other emerging markets.
However, the software giant witnessed continuing momentum in services, which experienced strong growth over last year. A popular theory doing the rounds is that Apple’s service lines will help to negate the impact of falling iPhone sales.
In fact, Apple is shortly expected to launch its highly anticipated video streaming service. A publishing service is expected to follow shortly. However, the jury is still out on the subject following skepticism over its revenue sharing models.
iPhone Sales Slide, Services Grow
In fiscal first-quarter 2019, declined 15% from the year-ago quarter to $51.98 billion, lagging the consensus mark of $52.27 billion. Top-line growth was negatively impacted by weakness in Greater China and emerging economies.
In contrast, Services increased 19.1% year over year to $10.88 billion and accounted for 12.9% of sales. (Read: Zacks Investment Research
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