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Apple is relying less and less on the iPhone, as fiscal Q3 2019 showed

As expected, Apple yesterday released the financial results for its third fiscal quarter of 2019. Revenue for the period was $ 53.8 billion (0.9% more compared to the same period of 2018), with net income of $ 10 billion (-13%) and gains from diluted $ 2.18 (-6.8%). International sales accounted for 59% of all quarterly revenues and gross margin for the period was 37.6%.

As usual, the CEO Tim cook and the CFO Luca Maestri held a conference on audio to announce the results and comment a little on the company's performance in the last period and the projection for what is yet to come.

In this event, whether during executive talk or question and answer sessions with analysts / journalists, they always paint interesting information. And we, of course, follow closely to bring Ma's last quarter highlights to you.

Money that never ends anymore

Apple's financial results were within expectations for Apple, which had estimated revenues of $ 52.5-54.5 billion and a gross margin of between 37% and 38%. As a result, the company now has approximately $ 211 billion in cash.

Although a substantial amount, it represents a 6% drop compared to the previous quarter, largely because of the share buyback program we have an idea of, only in the third quarter of fiscal 2019 did Apple repurchase 88 million shares ( $ 17 billion investment).

Growth in all regions

According to Cook, Apple's revenues have grown in all regions where Apple operates, in all product categories (except the iPhone). This was also the best fiscal third quarter for Apple Retail Stores (currently there are 506 stores in 22 countries).

Even in China, where Apple was struggling, things are getting better. According to Cook, the company saw major improvements in the country (both sales of iPhones and products of other categories), growing again by l. The Services segment grew by two digits, mainly due to the performance of the App Store.

Maestri commented that Apple has made significant revenue improvements in emerging markets; in India and in Brazil, the growth was two digits; In Vietnam and the Philippines, the company set new records for the third fiscal quarter.

iPhone falling; other compensating products

The drop in the iPhone segment was quite large, 10.9%. Still, the smartphone's installed base has reached a new record in all segments where the company operates.

Even with the fall of the iPhone, the business performance of the other segments (Mac, iPad, Wearables, Home & Accessories, and Services) more than offset this loss.

Incidentally, it was the first time in Ma's recent history that, together, the values ??of these segments exceeded the iPhone's revenues (US $ 27.7 billion). vs. $ 25.9 billion), showing that Apple is moving toward becoming less and less dependent on the revenue generated by its smartphone.

Taking iPhone out of the game, product categories have grown by 20%! Still, Maestri said the iPhone had a year-on-year performance improvement in 15 of the company's 20 largest markets. The iPhone upgrades program grew 5x compared to the same period of 2018.

Speaking specifically of the Mac, the fiscal quarter was a record in the US, Europe, and Japan, quite far from the PC industry as a whole. The segment grew in four of the five regions where Apple operates, reaching the largest installed base of Macs ever seen.

The iPad grew in all five geographic segments this was the third quarter in a row as iPad numbers grew; over half of customers who purchased iPads during the quarter were new; iPad's active installed base has reached a new high!

App Store Record; Apple Pay taking off

The Services keep doing beautiful. The App Store, for example, set a new record for the third fiscal quarter, with double-digit growth. Others that had similar growth were Apple Music, iCloud and AppleCare + (his best fiscal quarter, inclusive). The ads on the App Store, in turn, had growth of three digits!

Subscriptions to apps offered by third-party developers grew 40 percent, according to Ma CFO.

The company has surpassed the barrier of 420 million subscribers paying for some service (be it Apple Music, Apple News + or iCloud space remembering that Apple Arcade and Apple TV + will soon join this catalog of offers). By 2020, the company is expected to exceed 500 million subscribers.

Apple Pay is already completing 1 billion transactions per month, a volume 2x larger than a year ago. Available in 47 markets, Ma's payment service gained more new users in the fiscal quarter than PayPal, with transaction volumes growing 4x faster. Service growth in the quarter was three digits!

Apple Card arriving in August

As we have already commented, Cook confirmed that several employees are testing the Apple Card and that the company's credit card will be released (US only) in August.

Wearable on

Revenue from ?wearable? products (Apple Watch, AirPods, and Beats phones) grew by over 50% in the quarter. Thus, only this product category could already be classified in the ranking. Fortune 200.

Note that Apple TV and accessories grew by two digits. And since we're talking about Apple TV, the new app had a 40% increase in views compared to the same period of 2018.

Speaking of Apple Watch and the ECG app, one of the strengths of the Apple Watch Series 4 that allows you to perform an electrocardiogram in a very simple and easy way, it is now available in 31 countries / regions after launch in Canada and Singapore. in the last week. By the end of the year, Apple intends to expand further.

Business with Intel

Cook recalled that last week Apple announced the acquisition of Intel's smartphone modem business, the company's second largest acquisition in value ($ 1 billion, second only to the purchase of Beats, for $ 3 billion).

The CEO welcomed Intel employees who are now part of Ma's staff and noted that the company is keen to control the creation / production of key components for its products.

Asked about the management of 5G during the Q&A session, the executive said he does not comment on the company's future products, but said that the 5G is still in a very early stage, especially thinking globally about the rumors of we will only see an ?iPhone 5G? in 2020.

User Satisfaction

According to Maestri, combined, the XS, XS Max and XR iPhones achieved 99% user satisfaction from 451 Research.

Already iPads, according to the same research firm, have a user satisfaction rate of 94%.

Production in China

During the Q&A session, Cook was asked about Apple's production in China. The CEO responded by saying that there has been a lot of speculation about this, but it is not necessary to pay so much attention to the matter. He also said that parts of Apple products come from everywhere (China, Korea, Japan and the United States).

In addition, the executive stated that the Mac Pro currently made in the US and that Apple would like to continue manufacturing the product in his country.

New business

According to Cook, 2/3 of the major banks (he did not specify which regions) are implementing Apple products; 90 of the top 100 banks by assets are now using company products.

The fiscal quarter in charts

Apple FQ3 2019 Graphics

Apple FQ3 2019 Graphics

Apple FQ3 2019 Graphics

Apple FQ3 2019 Graphics

Apple FQ3 2019 Graphics

Apple FQ3 2019 Graphics

Wall Street Reaction

Yesterday, shortly after the release of the results, Apple shares soared more than 4 percent in post-closing trading, and if it held to the same level today, the company would once again breach the $ 1 rail market value barrier.

$ AAPL

Although the high was not confirmed, the papers closed the day worth $ 213.04 (high of 2.04%). Thus, the market cap from Ma was $ 980.2 billion.

Forecast for the fourth fiscal quarter of 2019

For the fourth quarter of fiscal 2019, Apple forecasts revenue of $ 61-64 billion, gross margin between 37.5% and 38.5%, operating expenses between $ 8.7 and $ 8.8 billion, other revenue / (expenses) of $ 200 million and a tax rate of approximately 16.5%.

via MacRumors, AppleInsider, MacStories