As iPhone revenue drops 10%, here are 6 things we learned from Apple's Q2 earnings call

Apple logo with US dollar bills
(Image credit: Future)

Apple has this week announced the results of its second financial quarter, revealing the company’s earnings, revenue, profits, and much much more. Aside from the usual revelation that Apple continues to print money to the tune of around $1 billion every three days, what are some of the things we learned from this call? Apple is notoriously stingy about forward-looking details on its earnings call, despite repeated attempts from analysts to tease out details about Apple’s next big thing. Here are 6 things we learned at the Apple Q2 earnings call. 

Revenue is good, could be better 

First up, we of course got Apple’s actual financial results. Apple reported revenue of $90.8 billion, down four percent year over year. That’s ever-so-slightly higher than consensus estimates of a round $90 billion. Of that, $46 billion came from iPhone, $7.5 billion from Mac, $5.6 billion from iPad, $7.9 billion from wearables like Apple Watch, and a whopping $23.9 billion from services like Apple Music and Apple TV Plus.

While Apple’s iPhone revenues are down, this doesn’t necessarily reflect a broader drop in sales, with Apple actually reporting an increase in sales in some markets including China. CEO Tim Cook revealed on the call that Apple’s year-on-year dearth in iPhone sales remains tied to channel inventory replenished in the March quarter last year, which was itself drawn from “significant pent-up demand from the December quarter COVID-related supply disruptions” to iPhone 14 Pro and Pro Max. Cook says the one-time gap is worth around $5 billion, and without the inflated numbers from last year, the iPhone would have shown growth year on year for Q2 in 2024. Like Apple, investors don’t appear phased by this, with AAPL prices jumping 5.84% in pre-market trading following the announcement. 

Vision Pro for business?

The EyeSight screen during the Persona setup process.

(Image credit: Brady Snyder / Future)

While Apple Vision Pro might not be a hot seller with the masses, Tim Cook says that half of Fortune 100 companies have purchased Vision Pro units for business purposes. That might only mean one or two per company, but clearly there’s at least some curiosity from the business world that will boost Apple’s confidence. 

iPhone defies China naysayers

Apple Nanjing East, Shanghai

(Image credit: Apple)

Despite multiple reports that iPhone sales fell in China last quarter, Tim Cook says that they actually grew. Revenue in China overall fell by 8%, but Apple’s best iPhones haven’t been on the slump everyone thought they were. One analyst asked Tim Cook “What are we missing here about Apple in China,” citing industry data that iPhone sales were weak. Cook replied to the tune of “we don’t really care about industry data.” 

The DOJ is 'misguided'

Tim Cook said that the Department of Justice lawsuit filed against Apple is ‘misguided’ in an interview with CNBC Thursday. The DOJ is suing Apple over claims the company’s iOS App Store business model suppresses ‘super apps’ and cloud streaming services. It also wants Apple to bring more interoperability to messaging and smartwatches across its ecosystem, as well as opening up digital wallet access beyond Apple Pay on iPhone. 

Apple will reveal its AI ‘advantage’, just not yet

Tim Cook teased Apple AI on the earnings call, stating Apple has ‘advantages that will differentiate us’ from the competition. He told CNBC “Looking ahead, we’re getting ready for an exciting product announcement next week that we think our customers will love. And next month, we have our Worldwide Developers Conference, which has generated enormous enthusiasm from our developers. We can’t wait to reveal what we have in store.” However, Cook was initially misquoted by CNBC, who stated Cook would announce these plans at the May 7 Let Loose iPad event.

Services is key

Apple’s services revenue, which represents the money Apple’s customers spend on Apple TV Plus, Apple One, Apple Music, iCloud, and beyond, now represents more revenue than Apple’s Mac, iPad, Apple Watch, Home, and accessories revenue combined. iPhone is still king by some margin, but Apple’s pivot towards more of a focus on selling services to existing customers seems to be paying dividends. Literally. 

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Stephen Warwick
News Editor

Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design. Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9