5 Most Important Takeaways from Apple’s Q4 2018 Earnings Call

Apple on Thursday announced its financial results for Q4 2018, which ended on Sept. 29, in an earnings call and press release. (Apple’s fourth quarter coincides with most financial calendars' third quarter.) All in all, Apple reported quarterly revenue of $62.9 billion – a 20 percent increase year-over-year. But that number doesn’t tell the whole story. Continue reading to learn the five key takeaways from Apple’s Q4 financial results.

5 It Will No Longer Report Unit Sales

This was, perhaps, the biggest unexpected bombshell that Apple dropped on investors and media outlets. Basically, going forward, Apple will no longer report unit sales for its iPhone, iPad and Mac segments.

The change will kick in starting next quarter and it’s a big deal for market analysts and watchers. Presumably, Apple is making the change to steer attention away from stagnant iPhone growth.

Apple CFO Luca Maestri announced the change and added that unit sales over a 90-day period are no longer as “relevant” as in Apple’s past.

4 Services Business Is (Still) Booming

Apple’s Services sector is continuing to grow. Largely expected to overtake the iPhone as Apple’s biggest driver of growth, the company reported an all-time revenue record of $10 billion and a 17 percent increase year-over-year for Q4 2018.

Services include iTunes, the App Store, Apple Music, iCloud, Apple Pay and AppleCare, among others. For these services, Apple says that its subscriber base has grown 50 percent — to 330 million subscribers — from this time last year.

Apple Pay is also expanding. Apple Pay transactions have tripled from last year and the proprietary system is now supported in 71 out of 100 major retailers in the U.S.

3 Growth Is Down, But Revenue Isn’t

Sales of iPhones are beginning to become stagnant. In other words, Apple just isn't selling as many iPhones as it used to. That’s not a trend exclusive to Apple — smartphone growth across the industry is down.

It’s not all doom-and-gloom for Apple, however. While unit sales are down, total revenue from iPhones shipped has actually grown to $37.2 billion (up from $28.8 billion this time last year). That’s largely due to increased Average Selling Price, which is $793 this year compared to $617.99 last year.

Put another way, Apple may be selling fewer iPhones. But it’s selling more expensive iPhones, which is having a noted positive impact on the company’s yearly revenues.

2 iPads and Macs Were Also Mediocre

Last quarter wasn’t the best for Macs and iPads. Apple reported mediocre Mac growth and revenue, and its iPad growth and revenue failed to meet analyst expectations.

Apple reported $4.1 billion in revenue from iPad sales with 9.7 million units shipped. Year-over-year, that’s down from $4.8 billion and 10.3 million units shipped. Mac revenue clocked in at $7.4 billion and 5.3 million units, compared to $7.2 billion and 5.4 million units this time last year.

But much of that may be attributable to an aging product lineup devoid of big upgrades (iMac Pro notwithstanding). The newly redesigned iPad Pro, as well as MacBook Air and Mac mini refreshes, could help in their respective segments.

1 Wearables Are Still on the Rise

Along with Services, there’s another area in which Apple is seeing market improvement in revenue and growth: wearables and "Other Products". That's to be expected, as the Apple Watch is the most popular wearable — and watch — in the world.

Apple said that sales of wearables like AirPods and Apple Watch grew more than 50 percent compared to the same quarter last year. The company didn’t break down individual sales units, but Apple has never done so for its Other Products category (which also includes HomePod, Beats and other products).

In related news, Apple is also renaming Other Products to “Wearables, Home and Accessories” starting in the December quarter.