Apple’s booming consumer hardware business is in steady decline.
Revenues for the company’s third quarter dropped for the second time in a row, to $42.4 billion, compared to $49.6 billion at the same time last year.
Of course, that still means it made a cool $7.8 billion profit across its business. And, while iPhone sales are clearly dropping off as the devices reach saturation point, that still means it sold more than 40 million new handsets. Not to be sniffed at.
One surprise growth area was in the company’s iPad business, which had been on the decline for the past 10 quarters.
That was seen particularly in sales of the most expensive iPad Pro, with CEO Tim Cook stating on the earnings call that half of those went straight into businesses.
Although unit sales of iPads were down 9 per cent to 9.95 million, revenue increased from $4.5 billion in the same quarter in 2015 to $4.9 billion today.
Cook made it clear that Apple’s now got its eye on providing bolt-ons for your enterprise hardware too, boasting that by next year the services division alone would be as big as a Fortune 100 company.
This quarter, services made $6 billion revenue for the company, 19 per cent more than a year earlier. They currently include things like managed or self-service device repair, as well as AppleCare support and Apple Pay.
It’s also partnered directly with the likes of IBM and Cisco on enterprise software development.
Although R&D spending is up, from $5.9 billion in the same period last year to $7.5 billion right now, with Tim Cook stating Apple is “high on VR”, managed enterprise services are really the edgy bet.
Look out Microsoft.