“We’ve done a great job with affordable programs around the world,” said Luca Maestri, Apple’s chief financial officer, on a call with analysts. “Most iPhones are sold with some kind of program, trade-in, installments, some kind of financing.”
The company overcame the declines in sales of its devices with continued growth in the App Store and watch sales. The company’s services business, which includes Apple Music subscriptions, App Store sales and Apple Pay, posted $21.21 billion in sales, an 8 percent increase from last year. The wearables business, which includes the Apple Watch and AirPods, reported that sales rose 2 percent, to $8.28 billion.
Apple will continue to rely on its existing businesses for the majority of sales in the coming years. In June, the company unveiled its first major new product since 2014: high-tech goggles that blend the real world with virtual reality. But the $3,500 device, the Vision Pro, won’t go on sale until next year. Analysts estimate Apple will sell fewer than half a million units, a fraction of the roughly 200 million iPhones it sells annually.
In the absence of a major new revenue stream, the company is focused on boosting sales in developing markets. It opened its first stores in India in April and welcomed crowds of eager shoppers. Its sales there have doubled in recent quarters from last year, as more and more Indians buy higher-priced phones. The increase in sales puts Apple in a position to capitalize on a market that was predicted to exist one billion smartphone users by 2026.
“While I’m pleased with our growth there, we still have a very, very modest and low share of the smartphone market,” said Tim Cook, Apple’s chief executive, speaking to analysts. “This is a huge opportunity for us.”
Apple is expected to release a new iPhone in September, as well as updated Apple Watch models. Wall Street and industry analysts who track the company’s supply chain do not expect any significant design changes or new features. Richard Kramer, partner at Arete Research, a stock research firm, said the 16-year-old iPhone has entered a phase where improvements are becoming “incrementally incremental.”