Apple’s Q3 2019 earnings show that sales for everything is growing—except the iPhone

Apple is basically killing it, if you ignore the iPhone.

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Apple announced its third-quarter results for FY 2019, and once again sales are strong for everything that isn’t an iPhone. Sales for Macs, iPads, Services, and Wearables were all up year over year, leading to Apple strongest June quarter on record, but just barely. All said, the company posted an increase of one percent over the year-ago quarter.

However, iPhone sales continue to drag on the company. Revenue from the handset dipped more than 10 percent from Q3 2018, posting roughly $26 billion in revenue versus $29.5 billion during the same quarter last year. Apple no longer breaks out iPhone sales, but last year Apple sold about 41 million handsets in the third quarter.

Excluding iPhone, revenue was up 17 percent year over year. However, Tim Cook said during the earnings call that the iPhone returned to growth in its retail stores in June.

The outlook for the company’s other categories is far rosier. iPads posted sales of $5 billion, the Mac rose to nearly $6 billion, and the all-important Services category jumped to $11.5 billion, an increase of nearly 15 percent and a record for the category. And it’s poised for tremendous growth in the second half of the year, as Apple Card—which Cook revealed will release in August—Apple TV +, and Apple Arcade all make their debuts. Cook also highlighted Apple Pay, which he says is used at a greater clip than PayPal.

Another bright spot for Apple is wearables, which includes Apple Watch and AirPods. The category posted a revenue leap of better than 50 percent, posting $5.5 billion as compared to $3.7 billion in 2018. Cook said Apple’s annual revenue from wearables alone is bigger than 60 percent of the companies in the Fortune 500.

While Apple’s sales dipped slightly in Greater China to $9.2 billion compared with $9.6 billion in 2018, Cook noted that revenue and the iPhone installed base increased in mainland China.

Looking ahead, Apple expects revenue between $61 billion and $64 billion in the fourth quarter, signaling that’s it’s bullish on the new iPhones, and other expected launches, including Apple Watch and a 16-inch MacBook Pro, as well as the release of the $6,000 Mac Pro. Cook lauded Apple’s earnings and teased “exciting” announcements to come, “with major launches on all of our platforms, new services and several new products.”

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