Deprived of the disease, Apple still shows its vision on two “auxiliary” businesses that few people notice are completely right.

On the last day of April, Apple announced its business results for the first quarter of 2020 (Apple fiscal second quarter 2020). Unexpectedly, the Covid-19 epidemic caused serious damage to Tim Cook’s company: revenue reached only 58.3 billion USD, significantly reduced from the predicted 62 – 67 billion USD. launched at the beginning of the quarter. All three product segments associated with Apple’s name, iPhone, iPad and Mac, witnessed declining sales compared to the same period in 2019.

Two arrivals save

But luckily for Apple, the two product segments promoted by Tim Cook in the past few years are services and accessories / wearables, which have all grown strongly to offset some of the revenue of iPhone, iPad and Mac.

Services and accessories, 2 weapons “save” Apple translation season.

More specifically, the service segment in the last quarter has recorded record sales in the entire history of the company. With $ 13.35 billion in revenue, this segment currently has 3 times the revenue of the iPad and 2 times the Mac. According to the statement of CFO Lucas Maestri, in 2020 Apple will accomplish its goal of doubling service revenue in 2016.

At the same time, Apple’s accessories segment also brought record sales in the first quarters of the year. The past quarter has also been the third quarter in a row that accessories sales surpassed Mac and iPad, making this segment the second most important hardware segment of Apple, just behind the iPhone. The “star” of accessories continues to be the Apple Watch: according to Apple, 75% of the users who bought Apple Watch in the past quarter were first-time buyers, showing that the wearable’s growth potential is still very large in the future. .

Because Apple’s total revenue has been almost unchanged, it can be said that it is the growth of services and accessories that helped Apple escape the recession during the difficult quarter.

Long-term vision

Revenue from services is not affected even when the hardware revenues are interrupted.

It is not difficult to see why the service sector can grow despite the disease. When users have to stay home, the demand for entertainment with Apple TV +, Apple Music or Apple Arcade will definitely increase. With the highest number of devices in circulation in the history, iFans are also “actively interacting with Apple’s ecosystem and digital products” (CFO Lucas Maestri). Apple is also continuing to devise strategies to promote this segment, such as allowing Apple Card users to suspend payments in March and April, or give away free 12 months to watch Apple TV + with iPhone. SE cheap (400 USD).

The success of the accessory / wearable segment can be considered a surprise, because like other hardware segments, this segment is severely affected when Apple’s supply chain in China was interrupted and Apple Store stores. Globally must be closed. However, it was during this period that the Apple Watch inadvertently demonstrated a core strength: enabling physicians to take care of health remotely. CEO Tim Cook affirmed:

“With guidance from the FDA on remote patient monitoring, the ECG app on Apple Watch is currently being used for more remote ECG monitoring, reducing exposure and exposure. workers and doctors “.

Luckily for Apple, Tim Cook shifted sales to services and accessories long before Covid-19 happened.

It was not until this quarter that Apple focused its attention on the services and accessories segment, which can be considered as the lesser-attractive segments than iPhones, iPads and Macs. Ever since iPhone XS sales were disappointing, Tim Cook immediately showed off the actual number of users in the Apple ecosystem, considering it a springboard for Apple TV +, Apple Music as well as Apple Watch and AirPods.

Up to now, this change has been effective. While supply chains were in turmoil, offices were closed and most of the Apple Store was not reopened, Apple’s revenue remained steady instead of plunging into crisis as predicted by Wall Street. It will be a more difficult second quarter (Apple has not even been able to make revenue estimates), but it seems that Tim Cook has found enough weapons to fight Covid-1.