Can Apple's 24x7 Services Store-Front Make Up for Falling iPhone Sales?

When Apple reports earnings Thursday, investors will be keen to see if its services segment raked in enough to help offset expected declines.

Share on Facebook Tweet Snapchat Share Reddit Comment
Can Apple's 24x7 Services Store-Front Make Up for Falling iPhone Sales?

Analysts are also likely to watch for clues about whether the iPhone SE is helping Apple gain customers

Highlights
  • Analysts expect pandemic disruptions to pull down revenue about 3 percent
  • The two expected growth spots are services revenue
  • Investors have viewed Apple as a safe haven during coronavirus

Many of Apple's physical stores re-opened and re-closed in recent months because of spikes in cases of the novel coronavirus.

But two of the iPhone maker's most important storefronts were open the whole time: The App Store and Apple's content businesses such as music and streaming video.

When Apple reports earnings Thursday, investors will be keen to see if its services segment raked in enough to help offset expected declines in most hardware sales and uncertainty about the timing of this fall's iPhone lineup, historically the company's biggest sales driver.

Analysts expect pandemic disruptions to pull down total revenue about 3 percent year-over-year to $52.1 billion (roughly Rs. 3.89 lakh crores) and Apple's bellwether iPhone business by nearly 14 percent in the third quarter, according to IBES data from Refinitiv as of July 28.

The two expected growth spots are services revenue - expected to be up 15 percent to $13.18 billion (roughly Rs. 98,563 crores) - and revenue from the companies wearables segment, expected to rise 8.6 percent to $6 billion (roughly Rs. 44,870 crores), according to Refinitiv data on July 28.

Investors have viewed Apple as a comparative safe haven during the pandemic, pushing up shares 65 percent since mid-March when much of the world was urged to stay home to help slow the spread of the novel coronavirus.

When Apple last reported its fiscal second quarter in April, the company did not give a forecast. Analysts do not expect it to give a forecast when it reports this week but will be listening for clues about whether iPhone production for this fall is on track after reports of production delays because of the pandemic.

Analysts are also likely to watch for clues about whether the budget iPhone SE, priced at $399 (Rs. 42,500 in India) and released in April, is helping Apple gain or retain customers.

Twenty-nine analysts rate Apple "buy" or "strong buy" and seven say "hold" and three have "sell" or lower ratings.

© Thomson Reuters 2020


Is Redmi Note 9 the perfect successor to Redmi Note 8? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts, Google Podcasts, or RSS, download the episode, or just hit the play button below.

Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Further reading: Apple, iPhone
Hisense to Launch in India, QLED and LED Smart TVs to Be Introduced on August 6
Apple May Be Working on 3D Audio Sound Technology for Rumoured Apple Glass, New Patent Suggests

Related Stories

 
 

Advertisement

Advertisement

© Copyright Red Pixels Ventures Limited 2020. All rights reserved.
Listen to the latest songs, only on JioSaavn.com