Apple's Q2 shows a decline in iPhone and Mac sales as services become the next big growth opportunity

In brief: In its recently released Q2 earnings report, Apple posted a quarterly revenue of $58 billion thanks largely in part to its core iPhone business making up over 53 percent of this figure. These numbers are a noticeable dip year-over-year and saw Apple giving a lot more attention to the services division making an all-time high revenue of $11.5 billion for the company.

A stagnating smartphone industry and huge potential and investments going into subscription services seem to be the two major trends in recent tech culture. As fiscal Q2 reports for companies begin to sprout across the web, Apple’s services look like its next big bet as iPhone sales continue to slump in the company’s latest quarterly results.

Despite the iPhone’s $31 billion revenue, this figure is still down year-over-year as Apple shipped 30% fewer units, according to data from IDC.

Apple's Q2 shows a decline in iPhone and Mac sales as services become the next big growth opportunity 1

Mac sales also suffered a decline because the company “faced some processor constraints in the March quarter”, Tim Cook said in the earnings call, further adding that “we believe our Mac business would have been up last quarter without those constraints.”

Another reason might have to do with the consumer backlash it faced for the Mac’s troublesome butterfly keyboard design, an issue that lingered on for years which the company only now appears to take seriously.

On the plus side, the iPad posted pleasing figures, which Cook remarked in the press release as “our strongest iPad growth in six years.” The company’s other divisions including wearables, home and accessories, and services all saw gains as well.

Apple's Q2 shows a decline in iPhone and Mac sales as services become the next big growth opportunity 2

Apple has been focusing more on services recently and is certainly aware of their potential as the next big growth opportunity. It has been making strides with Apple Music and recently launched its News+ subscription service for avid magazine readers. The soon-to-launch Apple TV+ and Apple Arcade are likely going to bolster its subscriber base across a variety of services.

Apple's Q2 shows a decline in iPhone and Mac sales as services become the next big growth opportunity 3

While streaming services are only going to compete more for our screens and money, Cook expects consumers to have multiple options and said that “We’re going to do our best to convince them that the Apple TV+ product should be one of them.”

Apple Arcade and TV+ are poised to launch sometime this fall as part of iOS 13 and macOS 10.15 as the company prepares to reveal more next month in its Worldwide Developers Conference.

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