×

Apple Services Grow 17% in Year-End 2019 Quarter, iPhone Sales Rise to Power Record Revenue and Earnings

CEO Tim Cook says 'Apple TV Plus is off to a rousing start' but doesn't disclose subscriber numbers

Apple turned in stellar results for the 2019 holiday quarter — its biggest ever in terms of revenue and earnings — including strong growth in its services business and a return to growth in iPhone revenue, which climbed 8%.

Revenue hit an all-time quarterly high of $91.82 billion, up 9% versus the year-ago period, for the three months ended Dec. 28, 2019. Earnings per share were $4.99, up 19%, also a record.

The tech behemoth handily beat Wall Street expectations, an impressive feat given the company’s already massive size. Analysts on average expected Apple to post $88.38 billion in revenue and EPS of $4.54 for the period, which is its fiscal first quarter of 2020.

Apple reported a record $12.72 billion in services revenue, up 17% year over year (compared with 18% growth in the September quarter). The services segment comprises a diverse group offerings, including the App Store, Apple Music, Apple TV Plus, Apple Arcade, Apple News Plus, Apple Pay and iCloud. The company doesn’t break out results for any of the specific services; CFO Luca Maestri said Apple Music and iCloud set records for quarterly revenue.

Apple TV Plus revenue “was immaterial to our results” for the year-end 2019 quarter, Maestri said on the earnings call Tuesday. But, he said, “over time” the company expects it to “start contributing to growth of the services business.”

The company’s Wearables, Home and Accessories unit — which includes AirPod and Apple Watch products — saw sales soar 37%, to $10.01 billion.

“We are thrilled to report Apple’s highest quarterly revenue ever, fueled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables,” CEO Tim Cook said in prepared remarks.

Apple did not reveal specific results for Apple TV Plus — its foray into the subscription-streaming biz — which debuted Nov. 1 with a handful of original programming. The service is regularly $4.99 per month but it’s free 12 months to customers who buy a new iPhone, iPad, Apple TV, Mac or iPod touch. The “vast majority” of Apple TV Plus’s estimated 33.6 million U.S. users as of the end of 2019 were not paying for it, according to research firm Ampere Analysis.

“Apple TV Plus is off to a rousing start,” Cook said on the earnings call. He congratulated the team behind “The Morning Show” for multiple Golden Globe Awards nominations (although Apple was shut out at the Globes). The CEO also gave a shout-out to “Morning Show” star Jennifer Aniston for winning the SAG Award for female actor, as well as Billy Crudup for receiving the Critics’ Choice Award for supporting actor in a TV drama.

Cook said more original content is coming to Apple TV Plus. “We continue to focus on stories that matter,” he said, calling out the recently premiered docu-series “Little America” from Kumail Nanjiani and Emily V. Gordon.

For the company’s core iPhone family, sales were $55.96 billion, up 7.6%, following several quarters of declines. Analysts had been upbeat on projections of stronger-than-expected sales of the iPhone 11, which began shipping Sept. 20. The newest iPhone model put an emphasis on photo and video features.

Apple’s overall installed base of devices topped 1.5 billion in the year-end 2019 quarter, according to the company. “We see this as a powerful testament to the satisfaction, engagement and loyalty of our customers — and a great driver of our growth across the board,” Cook said.

Apple’s revenue grew in all regions worldwide except Japan. Sales sagged during fiscal Q1 2020 in the company’s iPad (down 11% to $5.98 billion) and Mac (down 3%, to $7.16 billion) segments.

More Digital

  • HQ Trivia

    HQ Trivia Lives? CEO Claims He's Found Potential Buyer for Live Game-Show App

    Hold the phone, HQties — there might be a second act for HQ Trivia. The once-buzzy live game-show app, whose audience had declined after peaking two years ago, shut down last week after the company ran out of money and a deal to sell it fell through. Now Rus Yusupov, CEO of parent company Intermedia [...]

  • Dolan Twins

    Dolan Twins to Launch Their First Podcast (EXCLUSIVE)

    The Dolan Twins, sibling digital influencers who have a combined following of more than 50 million across internet platforms, are set to launch their first podcast: “Deeper With The Dolan Twins.” The new weekly podcast from 20-year-old Ethan and Grayson Dolan is being produced under an exclusive pact with Cadence13, a division of Entercom Communications’ [...]

  • Justin Bieber Changes album cover

    Following Lil Nas X, Justin Bieber Track Is Latest to Highlight Online Marketplace

    A shout-out on social media from Justin Bieber has brought some additional shine to Splice Sounds, the popular platform for rights-cleared sounds and beats. The track “Running Over,” from Bieber’s album “Changes” and featuring Lil Dicky, was produced by The Audibles and is based on a loop created by British artist Laxcity and uploaded to Splice. [...]

  • LadBaby at Abbey Road Studio, London,

    Facebook Leans on Local Creators to Grow Watch and Hit New Target Areas

    As Facebook leans into sports, non-scripted and select scripted properties, it’s increasingly looking to an army of creators rather than A-list celebrities to tap into all three target areas as they grow businesses on the Watch platform. Facebook’s newly appointed head of entertainment media partnerships for Northern Europe Anna Higgs tells Variety, “The Watch strategy [...]

  • Apple-Coronavirus

    Apple Warns of Sales Shortfall for March 2020 Quarter, Blaming Coronavirus Outbreak

    Apple said the spread of the coronavirus in China has disrupted iPhone manufacturing and driven down sales in the country. As a result, the tech giant said it now expects to undershoot the revenue guidance it previously provided, of between $63.0 billion and $67.0 billion its fiscal 2020 second quarter (which ends March 28). “Work [...]

  • Jeff Bezos

    Jeff Bezos Forms $10 Billion Fund to Fight Climate Change

    Multi-billionaire Jeff Bezos, the world’s wealthiest person, announced a $10 billion fund to invest in projects that will combat the alarming trend of climate change. The Amazon founder and CEO announced the formation of the Bezos Earth Fund in an Instagram post Monday (Feb. 17).⁣⁣⁣ According to Bezos, the fund will begin issuing grants this [...]

  • Jake Paul

    YouTuber Jake Paul Launches Entrepreneur How-To Platform, Financial Freedom Movement

    YouTuber Jake Paul wants you to be financially free, for $19.99 a month.  At a rally on Saturday, the content creator — along with influencer friends and around 50 teenage and tween-age fans, some chaperoned by parents — launched the Financial Freedom Movement (FFM) in partnership with GenZ Holdings Inc., a Los Angeles-based brand development [...]

More From Our Brands

Access exclusive content