Apple earnings show strong iPad and Mac sales can’t make up for the iPhone

Apple announced its fourth-quarter earnings today after the bell, and it was something of a strange quarter because, unlike some previous years (including last year), this quarter’s numbers did not include an iPhone launch. The iPhone 12’s various models ship in October and November instead of September this year.

CEO Tim Cook proudly announced double-digit YOY growth in all product categories besides iPhone on the call, but the iPhone is important: Apple’s total revenue was up only 1 percent year over year, with iPhone revenue down almost 21 percent.

While the iPhone didn’t help push up the bottom line, Apple did launch other products during the period, including the redesigned iPad Air and two Apple Watches: the Apple Watch Series 6 and the Apple Watch SE. iPad revenue was up a substantial 46 percent YOY (it totaled $6.8 billion), and Mac revenue was also strong at $9 billion, or 28-percent more than the same quarter last year.

Apple’s increasing emphasis on services is a well-trodden story by this point, but it continued in Cook’s remarks to investors on the earnings call. Services were up 16.3 percent year over year, totaling $14.55 billion—that’s more revenue than any other product category besides the iPhone ($26.44 billion in this down quarter).

Cook specifically called out Apple TV+ as having a good quarter. The streaming service appeared to outsiders to have a slow launch this time last year—especially in contrast to the massively successful Disney+, which began service at almost the same time. But Cook spoke of Apple TV+ in a positive tone and named the series Ted Lasso as a notable success. The sports comedy starring Jason Sudeikis has drawn praise for its positive, uplifting vibe, and it might be Apple TV+’s biggest hit yet—though Apple has not released as many numbers about Apple TV+ viewership as many would like.