Strength of Apple's Wearables Category Makes Up for Waning iPhone Sales

Apple's Wearables, Home, and Accessories category, which includes devices like the AirPods and Apple Watch, set a new June quarter revenue record of $5.5 billion, up from $3.7 billion in the year-ago quarter.

Sales from Apple's wearables category helped make up for weak iPhone sales this quarter. iPhone revenue came in at $26 billion, down from $29.5 billion in third quarter of 2018.


Apple CEO Tim Cook said that wearables had an "absolute "blowout" quarter with growth well over 50 percent. Apple Watch set a new June quarter revenue record and is reaching millions of new users. More than 75 percent of buyers in the June quarter were first time Apple Watch buyers.

Apple's services category, which hit a new all-time high revenue record of $11.46 billion, also helped Apple make up for the 12 percent decline in iPhone revenue.

Wearables and services combined are now the size of a Fortune 50 company according to Cook. Cook also said that Apple's wearables business is larger than 60 percent of companies in the Fortune 500.



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8 weeks ago
Just as expected. I’ve been saying in this forum since before the launch of the Apple Watch that wearables were the next growth market for Apple. So far, they’ve launched 2 of the 3 expected pieces: Apple Watch and AirPods. When Glasses are added, they’ll complete the trinity and the iPhone era will dawn.

Your Watch will be your primary device. AirPods and Glasses will complement it. A slab of glass in your pocket will be entirely optional.
Rating: 6 Votes
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8 weeks ago
Just imagine if the Apple Watch could work with Android.
Rating: 5 Votes
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8 weeks ago
The AW has led me to dropping 25 lbs and maintain my Weight for almost an entire year now. I always fluctuated in weight. Was never out of shape- just my weight would fluctuate. It hasn’t since owning my watch.
Rating: 3 Votes
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8 weeks ago
I’ve had some heart issues this year and my Apple Watch has proved invaluable. It’s heart rate monitor is damn accurate and comparable to those in hospital or that the paramedics use. And I only have a series 1. I see more and more people with them now, because they work with iPhones from is it the 6 and up? Then people are keeping their old phones and grabbing the watch.
Rating: 2 Votes
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8 weeks ago
I say strength of the wearables is causing the decline. As for me I chose a new Apple Watch over replacing my X. I don’t think I am alone.
Rating: 2 Votes
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7 weeks ago
Just bought an Apple Watch 4 with some unexpected bonus money. Who knew I was riding the new trend of purchasing wearables? :-) And I'm still using an iPhone 6s (and perfectly happy with it).

Seriously, though, for me, the watch just finally became interesting enough to purchase. Certain things take a lot of iterations before they can hit the feature / price / functionality sweet spot to be attractive to a large segment. Kudos to Apple for sticking with it.
Rating: 2 Votes
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7 weeks ago

Just as expected. I’ve been saying in this forum since before the launch of the Apple Watch that wearables were the next growth market for Apple. So far, they’ve launched 2 of the 3 expected pieces: Apple Watch and AirPods. When Glasses are added, they’ll complete the trinity and the iPhone era will dawn.

Your Watch will be your primary device. AirPods and Glasses will complement it. A slab of glass in your pocket will be entirely optional.


We here!

I’ve been staying this as well: The Watch with Glasses (retina recognition + voice + sign language control / gesture control) will be key.
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I agree. The iPhone was the catalyst to changing how people communicate. The very idea of talking into a device has changed. You don't really need an iPhone to talk to someone. You can do it all on your Apple Watch. You add AR capable glasses and "The piece of glass in your pocket" is no longer needed. Siri in the cloud containing all of your contact info and one tap on your AirPods, you make a call or dictate a message. AR glasses will provide contextually relevant information automatically integrated into your perception of the physical world so rather than looking at a screen in your hand you are now free to engage the world around you while looking at it.


And screen time goes out the window lol.
Rating: 1 Votes
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7 weeks ago
I agree. The iPhone was the catalyst to changing how people communicate. The very idea of talking into a device has changed. You don't really need an iPhone to talk to someone. You can do it all on your Apple Watch. You add AR capable glasses and "The piece of glass in your pocket" is no longer needed. Siri in the cloud containing all of your contact info and one tap on your AirPods, you make a call or dictate a message. AR glasses will provide contextually relevant information automatically integrated into your perception of the physical world so rather than looking at a screen in your hand you are now free to engage the world around you while looking at it.
Rating: 1 Votes
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7 weeks ago

It always kind of flusters me how people fail to think three dimensionally. The conditions that exist today are not necessarily the conditions that will exist in the future when changes happen. Further, these changes are incremental. None of this transition will happen instantly.

Of course, if you had said that Apple was going to kill the iPod overnight and replace it 1:1 with something untested (the iPhone), then of course the iTunes Store would have died because it relied on the iPod. Consequently, the halo effect that Apple had spent half a decade building around the iPod would have suffered as well, bringing down Mac sales with it.

Apple has been decentralizing its reliance on the iPhone. Apple Watch does Siri which Apple is bringing to third parties with Shortcuts, which is building up to a future of conversational UI for third party apps, bringing with it some of their revenue. Apple Watch also does Music, extending and preserving the Apple Music subscription outside of the iPhone sphere.

Apple is building out an ecosystem of hardware from the Watch (Siri apps, AppleMusic), to Apple TV (AppleTV+, Apple Arcade), to HomePod (AppleMusic, HomeKit), to iPad (AppleNews+) that will altogether, albeit over time, replace the iPhone's requirement in that ecosystem.

Glasses will be based on AR and an entirely new concept of applications that will derive from there, both existing and those that haven't been invented yet. In the same way that Uber or Instagram couldn't have existed without the iPhone, whatever apps that are coming for AR, will only exist because we're carrying around glasses that overlay apps onto the real world. This won't happen before Glasses, so we'll have to wait for that to develop after they're here.

The iPhone isn't going to disappear, it's just going to diminish in relevance and certainly in its central critical role to Apple's financial wellbeing. We're seeing that today with wearables growth and with services revenue at an all time high ('https://forums.macrumors.com/threads/apples-services-revenue-hits-new-all-time-high-of-11-46-billion.2191851/#post-27584832').

There must be several people that have shorted the stock and have huge margin calls.
Rating: 1 Votes
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8 weeks ago

Love my Apple Watch, but I'm still struggling with the whole smart glasses thing! People wearing glasses with cameras in them seems a bit creepy to me, and I wonder how socially acceptable it would be? I could see the adoption rate being seriously hampered by that.

Having said that, if any company can find a way to implement this correctly, it'll be Apple. So very interested to see what happens in this space over the next few years!


If you had told people in 1990 that it would be acceptable for everyone to bring a camera into gym change rooms and for people to have cameras in their homes, they would have said it’s creepy. Our generation might still find it a bit unsettling but young people will completely adapt to the concept of having everything you see a potential shareable clip. We’ll just adjust to the idea that if you’re in public, you might be recorded. Privacy is behind closed doors.
Rating: 1 Votes
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