Apple expects revenue from iPhone, wearables, some services to decline in June quarter

Although Apple is not offering earnings forecasts for its third fiscal quarter of 2020, CFO Luca Maestri said it expects revenue from the iPhone, portable devices, and certain services experience a sequential decline in the next quarter of June.

Despite the dynamism of Apple’s profits for its second fiscal quarter of 2020, announced Thursday, revenues from the company’s portable segment are expected to “get worse”.

Maestri offered the forecast in a earnings conference call Thursday with investors.

“On the iPhone and portable devices, we expect year-over-year revenue performance to deteriorate in the June quarter compared to the March quarter,” said Maestri. “On iPad and Mac, we expect year-over-year revenue performance improvements in the June quarter.”

The June quarter generally sees weak sales for the iPhone and portable devices like Apple, with some customers refraining from buying on the promise of new hardware that traditionally debuts in the fall. In recent years, September has become Apple’s exit window for new iPhone and Apple models, as well as the accessories that come with it.

Apple is struggling with stagnant iPhone sales. In the last quarter, smartphone revenues slipped to $ 28.96 billion from $ 31 billion in the same period last year. However, the flagship models still lead the way, as Maestri noted that the iPhone 11 was the best-selling iPhone each week of the quarter.

According to Omdia estimates, released today, iPhone shipments fell to 38.5 million units for the quarter, down 12% year-over-year and 45% sequentially. And that includes the first results from the recently launched iPhone SE.

Q2 2020 revenue

Finally, Maestri, in response to a question from an analyst, said he expects AppleCare and advertising to see a decline in the next quarter.

“Given the overall economic environment and the level of demand at the moment, we expect two companies to be affected in the June quarter,” he said. “One of them is AppleCare. AppleCare is basically made up of our product repair business and the warranty agreements we signed with our customers when we bought our devices. These two companies were obviously affected by store closings. “

Advertising on the App Store, Apple New and third party offer are also expected to be affected due to “overall economic weakness” and the uncertainty surrounding COVID-19, said Maestri.

“So these are two things that, during the June quarter, will create a headwind for the service sector,” he said.

Apple declined to provide guidance for the coming period due to “lack of visibility and short-term uncertainty”.

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