Slowing iPhone Sales Faced by Apple in Q2 2019, Yet Services Sector Flourishing Rapidly
Apple's Q2 2019 results showed a mixed picture, with the tech giant reporting a 5% decrease in revenue compared to the same period in 2018, amounting to $58 billion. However, the company's financial performance in 2025 presents a more nuanced picture.
iPhone Sales
For Q3 2025 (quarter ended June 28, 2025), Apple reported a 10% year-over-year revenue growth, with strong iPhone sales partly attributed to customers upgrading ahead of tariff hikes. Yet, another source indicated a modest decline or stagnation in iPhone revenue in early 2025, with some mixed signals about demand for the iPhone 16 lineup. Overall, the iPhone remains the main revenue driver but has shown signs of softer demand compared to its previous record growth.
Services Division
Apple’s services business is a significant growth engine, reaching an all-time revenue record of $27.4 billion in Q3 2025, up 13% year-over-year. This growth spans across the App Store, Apple Music, Apple TV+, iCloud, and other services, with over 1 billion paid subscriptions reported. Services now account for a larger share of Apple’s revenue, reflecting successful diversification efforts away from hardware dependence.
Wearables, Home and Accessories
This segment saw a 9% revenue decline to $7.4 billion, impacted by tough year-over-year comparisons and possibly saturation or increased competition. Despite the revenue dip, the Apple Watch continues to grow its installed base, with a record number of upgraders and many new customers.
In summary, while the iPhone segment faced headwinds and some sales softness in 2025, likely due to market saturation and competitive pressures, Apple’s services sector is thriving, substantially boosting overall revenue and profits. Wearables have declined in revenue but still show strong user engagement in specific products like the Apple Watch. Apple’s overall revenue growth, including from Mac and other segments, has kept the company on a strong financial track, with total revenues reaching $94 billion in Q3 2025 and net income consistently near $90-100 billion annually.
Notably, the wearables division (including Apple Watch and AirPods) saw a nearly 50% increase in sales year over year. The tech giant's 2019 Worldwide Developers Conference is scheduled for June. Apple's stock spiked over 4% and the company re-approached its $1 trillion market value in extended trading, according to CNBC. Competition from rivals in China offering lower-price, feature-rich handsets has been a factor in the decline of iPhone sales. Apple's trade-in and financing programs showed a four-fold increase in volume since the rollout of new programs in the U.S., Spain, Italy, the UK, China, and Australia. Apple's global install base includes 1.4 billion devices as of Q2 2019, up from 900 million at the end of last year. The Mac division's sales in Q2 2019 were $5.5 billion, under a projected $5.85 billion, due to "processor constraints". Apple derives about one third of its net profit from services, according to TechCrunch. Apple's sales in Greater China for Q2 2019 were $10.2 billion, a decrease from $13 billion in Q2 2018. iPhone sales accounted for 54% of Apple's quarterly revenue in Q2 2019, a decrease from 61% in Q2 2018. iPad sales in Q2 2019 were $4.8 billion, an increase from $4 billion in Q2 2018. Apple's services division accounted for nearly 20% of its Q2 2019 revenue, an increase from 16.1% in Q2 2018. Apple has 390 million subscribers across all its services, an increase of 30 million from last quarter. Apple's services division brought in about $11.5 billion in Q2 2019, an all-time high. Apple projects it will surpass half a billion subscribers by 2020, likely based on its projections for its forthcoming streaming video and gaming services.
[1] Apple Q3 2025 earnings report [2] Apple Q3 2025 financial results [3] Apple's Services Business is a Major Growth Engine [4] Apple's iPhone Sales Stagnate Amidst Competitive Pressure
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