Wearables New Revenue Bet For Apple, Awaits Reaction To Its New Streaming Service

Apple Inc Chief Executive Tim Cook is betting strong on growth in the company’s wearables business such as the noise-cancelling AirPods Pro while also hoping and end soon for the trade war between the United States and China. This was opined by the executive at the event for the crucial holiday shopping quarter earnings reporting by the company which beat Wall Street estimates for the crucial holiday shopping quarter.

The latest strategy of Apple is to slowly shift away dependence on the sale of its flagship iPhones and find new revenue streams even as its smartphone sale accounts for over half its revenue. The focus of the company now is on services and wearables. This strategy of the company is going on simultaneously with its efforts to avoid being hit by the US-China trade war as far as possible.

For its fiscal first quarter that ends in December, Apple is expecting sale of between $85.5 billion and $89.5 billion and a mid point of $87.5 billion which is more than what the market had been expecting at $86.9 billion, according to IBES data from Refinitiv.

There was a 2 per cent rise in Apple shares following the announcement.

The strong sales of services and wearables was stressed upon by Cook in an interview with the news agency Reuters as well as touting “a very, very good start” for sales of the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max that were released last month. The better-than-expected forecast by the company clearly indicates that it is hopeful of a quick resolution of the US-China trade war.

“I don’t know every chapter of the book, but I think that will eventually happen,” Cook said. “I certainly hope it happens during the quarter, but we’ll see about that.”

“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables and iPad,” said Cook. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”

“Our strong business performance drove record Q4 EPS of $3.03 and record Q4 operating cash flow of $19.9 billion,” said Luca Maestri, Apple’s CFO. “We also returned over $21 billion to shareholders, including almost $18 billion in share repurchases and $3.5 billion in dividends and equivalents, as we continue on our path to reaching a net cash neutral position over time.”

Analysts view that more portion of the total revenues for Apple are mow generated from its accessories business such as the Apple Watch and AirPods as well as its new services such as its Apple Card credit card. The company is also hoping for good revenues from its soon to be launched streaming television service. Cook said on the conference call that customers will be able to buy iPhones using the Apple Card with no interest for 24 months.

(Adapted from MarketWatch.com & Apple.com)

Categories: Creativity, Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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