Apple announced revenue decline in the previous quarter. This is not a coincidence.
The company also expects sales to be weaker than expected in this quarter, suggesting that iPhone sales are declining, which could lead to a decline in future revenues.
Usually, the fall in revenue will not lead to an increase in stock prices, but in after-hours trading on Tuesday, Apple's stock price grew by more than 5%. Why?
Vejbus analyst Daniel Eves made three reasons. The first is a revenue forecast. Although the forecast is lower than the analyst's average estimate, it is not as low as the market is concerned.
The other two factors are the software and services business. When the iPhone's sales were weak, the company began to strengthen the software and services. Although iPhone revenue has fallen by 15% in the last quarter, software and service revenues have risen by more than 19% after changing the income principle.
Apple reported that Apple Music, iCloud and Apple Pay had a gross margin of 63% in the previous quarter.
Avis said the gross margin was estimated at 60 percent, and Apple's stock price increased to $ 200 per share.
He also noted that the number of paid subscribers for these services is very important because this income can be repeated and more predictable. On average, iPhone users will wait long before they can buy a new one.
"In various service industries, we now have more than 360 million subscribers to pay, which is an increase of 120 million compared to a year ago," Apple's chief financial officer, Luca Maestri, said on Tuesday. "Since this type of business dynamics continues to be strong, in 2020, paid subscribers will exceed 500m euros."