With its latest financial report, Apple is showing it can move beyond the iPhone with gadgets and services that can help the California tech giant weather the slumping smartphone market.
In the just-ended quarter, Apple took in less than half its revenue from the iPhone, the longtime cash and profit driver for the company, representing a milestone for the company.
Apple managed to grow its overall revenues, albeit by a modest 1 percent, to US$ 53.8 billion, even as iPhone revenues plunged nearly 12 percent in the April-June period.
The company delivered strong growth from digital content and services that include its Apply Pay and Apple Music, along with wearables and accessories like the Apple Watch and Air Pods.
Apple is preparing to launch its branded credit card in August that ties into its digital wallet, as well as its own streaming television service to compete with Netflix and others, with at least US$ 1 billion invested in original content.
The results show Apple is lessening its dependence on the iPhone, analysts said.
"As the smartphone market matures Apple can no longer rely on iPhones alone to power the company forward," said Avi Greengart of the consultancy Techsponential.
"Apple has been signaling for a while that its plan was to diversify into services and we've seen from the latest results that this strategy is working quite well."
Apple's update should allay investor concerns that the company's growth could be hobbled by a sputtering smartphone market, said a research note from Gene Munster and Will Thompson of the equity firm Loup Ventures.
"We believe the Street is systematically undervaluing Apple's ecosystem by focusing on hardware sales instead of revenue and earnings growth plus optionality," Munster and Thompson wrote.
"We believe this quarter's results and the roadmap for the next two years will prove to be a turning point for investors to begin valuing Apple with a more appropriate multiple.
In the just-ended quarter, Apple took in less than half its revenue from the iPhone, the longtime cash and profit driver for the company, representing a milestone for the company.
Apple managed to grow its overall revenues, albeit by a modest 1 percent, to US$ 53.8 billion, even as iPhone revenues plunged nearly 12 percent in the April-June period.
The company delivered strong growth from digital content and services that include its Apply Pay and Apple Music, along with wearables and accessories like the Apple Watch and Air Pods.
Apple is preparing to launch its branded credit card in August that ties into its digital wallet, as well as its own streaming television service to compete with Netflix and others, with at least US$ 1 billion invested in original content.
The results show Apple is lessening its dependence on the iPhone, analysts said.
"As the smartphone market matures Apple can no longer rely on iPhones alone to power the company forward," said Avi Greengart of the consultancy Techsponential.
"Apple has been signaling for a while that its plan was to diversify into services and we've seen from the latest results that this strategy is working quite well."
Apple's update should allay investor concerns that the company's growth could be hobbled by a sputtering smartphone market, said a research note from Gene Munster and Will Thompson of the equity firm Loup Ventures.
"We believe the Street is systematically undervaluing Apple's ecosystem by focusing on hardware sales instead of revenue and earnings growth plus optionality," Munster and Thompson wrote.
"We believe this quarter's results and the roadmap for the next two years will prove to be a turning point for investors to begin valuing Apple with a more appropriate multiple.
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