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Apple’s iPhone Sales Continue to Slump as Services Surge

After a shaky holiday quarter in which iPhone sales declined for the first time ever, Apple needed a winning start to 2019.

Well, iPhone sales are still slipping — the company made $6 billion less from iPhone sales in the second quarter of 2019 than it did in the same quarter last year — but Apple is still turning a profit. The company’s focus going forward remains services and wearable, two categories CEO Tim Cook has highlighted every quarter as it became clear that iPhones couldn’t sustain Apple forever.

The iPhone still accounts for 54 percent of Apple's business, but that's declining. Last year, the iPhone made up 61 percent of sales.

Overall, Apple’s revenue dipped 5 percent year-over-year, down to $58 billion. But revenue from services, which include Apple Music and Apple Pay, grew by $1.6 billion, up to $11.5 billion. The wearable and accessories category, which includes the Apple Watch and AirPods, grew $1.2 billion year-over-year. Apple is counting on that growth to make up for the iPhone's decline.

“Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for services, and the strong momentum of our wearable, home and accessories category, which set a new March quarter record,” Cook said in the company’s second-quarter report.

“We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services. We’re looking forward to sharing more with developers and customers at Apple’s 30th annual Worldwide Developers Conference in June.”