Apple Inc on Wednesday reported stronger-than-expected profits for the past quarter, fueled by growth in digital services and wearables that helped offset slower iPhone sales.
Profit in the quarter ending in September dipped 4 percent from a year ago to US$13.7 billion, while revenues edged up 2 percent to US$64 billion.
Apple, set to launch a new streaming television service this week, saw strong revenue gains in its services segment, which includes music, digital payments and software, and in its segment for wearables and accessories that includes its Home Pod, Apple Watch and ear buds.
Chief executive officer Tim Cook said Apple saw its best-ever revenue gains for the fiscal fourth quarter period.
Cook hailed the results as “the conclusion of a remarkable fiscal 2019 for Apple,” and said the company “established new all-time highs for multiple services categories.”
Apple, which has ceased reporting unit sales of iPhones, said revenue from its smartphones fell 9 percent in the quarter to US$33.4 billion.
Services accounted for 20 percent of revenues, chief financial officer Luca Maestri said, with 18 percent growth in the segment to US$12.5 billion.
The wearables and accessories category produced revenue growth of 54 percent to US$6.5 billion, led by gains in sales of Apple Watch and the wearable Air Pods.
Apple saw modest sales declines in its “greater China” region and in Europe and Japan, but this was offset by gains in North America and elsewhere in Asia.
The firm said it would allow customers to purchase the devices interest-free with its Apple Card and pay over 24 months.
“It’s early but the trends look very good” for the iPhone, Cook said, when asked about sales of the new devices. “We’re bullish.”
Apple said it ended the quarter with about US$260 billion cash on hand.
Separately, Samsung Electronics Co saw net profits slump by more than half in the third quarter, hit by an enduring downturn in the global chip market.
Net profits in the three months to September were 6.29 trillion won (US$5.40 billion), the world’s largest smartphone and memorychip maker said yesterday — down 52 percent year-on-year.
“Earnings from the memory business slumped significantly year-on-year as memory chip prices continued its downward trend,” the company said in a statement.
Samsung leads the global smartphone market with a 23 percent share, trailed by Chinese competitors Huawei Technologies Co (華為) and Oppo Mobile Telecommunications Corp (歐珀), with Apple in fourth place, sales tracker IHS Markit said.
Samsung said profits in its mobile division had been boosted by strong sales of the Galaxy Note 10 and its A series devices, along with bigger margins for mass-market models.
“The business also expanded its 5G product offerings and launched the Galaxy Fold, demonstrating Samsung’s technology leadership,” Samsung added.
Operating profit plunged 55.7 percent to 7.8 trillion won in the third quarter, the firm said, while sales fell 5.3 percent to 62 trillion won
However, analysts voiced optimism for the coming months, noting that falling inventory levels for semiconductors — which account for more than half of Samsung’s profit — would help stabilize chip prices after double-digit drops this year.
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