Apple released its quarterly earnings this afternoon for the first time since the COVID-19 outbreak began to reshape lives and economies, and the results are unsurprisingly mixed. The company saw slumps in hardware sales almost across the board, but it reported a total of $58.3 billion in revenue — just edging out its performance this time last year.
“Despite COVID-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter,” CEO Tim Cook said in a statement.
Today’s results didn’t come out of the blue. Earlier this year, Apple confirmed to its shareholders that it would not meet its previous revenue guidance of between $63 billion and $67 billion because of a “slower return to normal conditions” than the company had anticipated. Cook noted today that, before the coronavirus had begun to reach massive proportions, Apple was expecting a highly successful quarter with revenue near the top of its guidance.
In this past quarter, Apple has continued with its work as best as possible and pushed forward with new product releases, including updated versions of the iPad Pro and MacBook Air. Those devices were released too late to have a significant impact on these results, though. Despite raking in $4.37 billion from its iPad business and $5.35 billion off Mac sales, the company still fell short of the watermark it set this time last year. Since it accounts for the majority of Apple’s business, it’s little surprise Apple’s iPhone business took the brunt of the damage — sales fell from $31 billion in the year-ago quarter to $28.9 billion this time. Apple didn’t elaborate on the cause of this dramatic dip in its initial release, but soft sales in China and coronavirus-related production delays likely contributed to the situation.
Despite these sales slumps, Apple did report a few successes in this quarter. The company’s services business — which has quickly become one of Apple’s most crucial growth areas — made all-time high $13.3 billion. Sales in Apple’s Wearables, Home and Accessories category surged slightly, too, generating $6.3 billion for the company.
For now at least, Apple seems to be holding everything together quite well, but there’s one important thing to remember: This is the last quarter on the books that wasn’t completely influenced by the worldwide COVID-19 outbreak. (Apple’s Q2 started at the beginning of January 2020, before the coronavirus situation began to spiral.) As a result, the big changes we’ve all had to grapple with will be more fully reflected in the company’s next earnings release. For instance, Apple closed all of its stores outside Greater China on March 13th, two weeks before the end of Q2. The effects of that decision will likely have a huge impact on Apple’s next batch of financials, as will the new iPhone SE, which seems well-positioned to help Apple gain ground with value-minded consumers. For now, we’ll have to see how things play out; Apple will certainly face questions about the future of its supply chains, production capability and new hardware development during its customary earnings call, and we’ll update this story with any notable tidbits.