Apple Company boosted by service streaming amid lockdown
Apple Company boosted by service streaming amid lockdown, For the first three months of the year, Apple has seen growth as falling device sales in China have been offset by demand for its streaming services due to coronavirus lockdowns.
Sales climbed to $58.3bn (£46.2bn), up from $58bn in 2019 and beating expectations of $54.5bn in the same period.
Apple boss Tim Cook said the company has seen online store a “record for streaming” and “phenomenal” production.
“China is going in the right direction” he said.
With the coronavirus shutdown hurting iPhone supply due to the closure of Chinese factories, and a decrease in demand for smartphones in China-a big market for Apple-during February and March, Mr Cook told investors in an earnings call on Thursday: “I don’t think I can recall a quarter where I was Apple’s prouder.” Apple said the quarter’s iPhone sales dropped 7.2 percent to $28.9 billion, compared to $28.9 billion.
However, its wearables, home and accessories division, which manufactures the Apple Watch and AirPods, rose 22.5 percent to $6.3 billion, while utilities, such as Apple Music and Apple TV subscriptions, soared 16.6 percent to $13.3 billion like-for-like.
While business in China hasn’t completely rebounded, Apple said all of the country’s stores had reopened by mid-March, and sales were up.
Net income rose 6.2 per cent to $33.5 billion for the six-month period ended March 28, 2020, up from $25.9 billion in the same period in 2019.
Mr Cook said that Apple was in a good position and that, at the end of March, its supply chain was “robust” and “back up and running in full swing.”
“The main bright spot for Apple was services, which increased by 17 percent year-over-year. As people spent more time on their phones while locked away at home, they were obviously spending more money on the App Store and some of Apple’s subscription services, including Apple Music and Arcade.” According to Sophie Lund-Yates, Hargreaves Lansdown’s equity analyst, the increase in demand
“Despite much talk about services, Apple is still very much a hardware company, and conditions weren’t perfect even before coronavirus,” she said.
Ms Lund-Yates added that the decision by Apple to award the new iPhone SE at half the cost of some of the previous Apple models is a smart way to convince consumers to upgrade during the lockdown.