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Apple experienced growth during the first three months of the year, as the decline in device sales in China was offset by demand for its streaming services due to the coronavirus blockade.
Sales rose to $ 58.3 billion (£ 46.2 billion), up from $ 58 billion in the same period in 2019 and exceeding expectations of $ 54.5 billion.
Apple chief Tim Cook said the company saw “record streaming” and “phenomenal” growth in the online store.
He added that “China is heading in the right direction.”
Despite the fact that the coronavirus blockade damaged iPhone supply due to the closure of Chinese factories and a drop in demand for devices in China, a major market for Apple, during February and March, Cook told investors in a call of earnings on Thursday: “I don’t think I can recall a quarter in which I have been prouder of Apple.”
Apple said iPhone sales for the quarter fell 7.2% to $ 28.9 billion, compared to $ 31 billion in the prior year.
However, its wearables, home and accessories division, which produces the Apple Watch and AirPods, increased 22.5% to £ 6.3bn, while services, such as subscriptions to Apple Music and Apple TV, increased 16.6% to $ 13.3bn like for like.
Although business in China has not fully recovered, Apple said that all of its stores in the country had reopened in mid-March and that sales were improving.
Net income for the six months ending March 28, 2020 increased 6.2% to $ 33.5 billion, up from $ 25.9 billion in the same period in 2019.
Cook said Apple was in a strong position and that its supply chain was “robust” and “operating at full capacity in late March.”
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Tim Cook said the blockade in China had not damaged Apple’s global supply chain
“While we cannot say with certainty how many chapters there are in this book, we can be sure that the ending will be a good one,” he told investors.
Apple said it will not issue forecasts for the following quarter, given the current uncertainties of the blockade, which has seen its sales move online or reduce collections.
Senior analyst at research firm eMarketer Yoram Wurmser said Apple’s performance was “quite solid.”
“The 1% growth in this environment is impressive, particularly given Apple’s degree of exposure to past blockages in Asia,” said Mr. Wurmser.
“Apple’s biggest bright spot was services, which grew 17% year-over-year. As people spent more time on their phones while locked up in their homes, they clearly spent more money on the App Store and some of the subscriptions services offered by Apple, including Apple Music and Arcade. “
According to Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, the surge in demand for wearable devices and services is encouraging for Apple, given the recent lackluster growth in iPhone sales.
“Despite much talk about services, Apple is still a hardware business. And even before the coronavirus, conditions were not perfect,” he said.
Lund-Yates added that Apple’s decision to price the new iPhone SE at half the cost of some of Apple’s newer models is a good way to convince customers to upgrade during the crash.
