“We’ve done a really good job with affordability programs around the world,” said Luca Maestri, Apple’s chief financial officer, during a call with analysts. “The majority of iPhones are sold using some kind of a program, trade-ins, installments, some kind of financing.”
The company weathered declines in sales of its devices with continued growth in App Store and watch sales. The company’s services business, which includes subscriptions to Apple Music, App Store sales and Apple Pay, posted $21.21 billion in sales, an 8 percent increase from a year earlier. The wearables business, which includes the Apple Watch and AirPods, reported that sales rose 2 percent, to $8.28 billion.
Apple will continue to lean on its existing businesses for the bulk 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 project that Apple will sell fewer than half a million units, a small fraction of the roughly 200 million iPhones that it sells annually.
In the absence of a major new revenue stream, the company has 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 rise in sales puts Apple in a position to capitalize on a market that is predicted to have a 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, during the call with analysts. “It’s a huge opportunity for us.”
Apple is expected to unveil a new iPhone in September, as well as updated models of the Apple Watch. Wall Street and industry analysts who track the company’s supply chain are not expecting any significant design changes or new features. Richard Kramer, partner at Arete Research, a stock research firm, said the 16-year-old iPhone had entered a phase where improvements were becoming “incrementally incremental.”