AirPods, HomePod and Apple Watch sales 'off the charts', according to Apple

AirPods, HomePod and Apple Watch sales 'off the charts', according to Apple

Shares rallied even as Apple's quarterly revenue declined 5 percent compared to the same period one year ago.

Apple has posted a decline in both profits and revenue in the second quarter, as sales of its main cash cow - the iPhone - fell 17 percent, stoking concerns of smartphone saturation.

For its fiscal third quarter to June, Apple forecast revenues of Dollars 52.5-54.5 billion, little changed from USD 53.3 billion reported in the year-earlier period.

Apple Inc shares rose nearly 5 percent on Wednesday, pushing the iPhone maker's market valuation back towards $1 trillion (£764 billion) as its quarterly report and upbeat forecast calmed investors anxious about slowing growth.

The results topped Wall Street expectations.

"The June guidance was a jaw-dropper in terms of strength and speaks to Cook and Cupertino getting back their sea legs" after the weak holiday season, Wedbush analyst Dan Ives wrote in a client note.

In an interview, Apple chief executive Tim Cook said iPhone sales started to strengthen during the last few weeks of the fiscal second quarter, including in China. Apple has had a goal of reaching $50 billion in Services revenue, which would double the $25 billion it took in during fiscal 2016.

"Our trade-in and financing programs that we implemented in our retail stores have been really well-received there", Cook said on a call with investors, adding that the improved trade relationship between the United States and China in recent weeks have improved Chinese consumer confidence.

Talking about the Apple Accelerator in Bengaluru, Mr Cook said the company is "very happy" with some of the things coming out of there. Analysts surveyed by Zacks had expected revenue of $52.09 billion.

While iPhone sales have been struggling, Apple has been focusing on its Services business, which includes AppleCare, iTunes, the App Store, Apple Music, Apple News+, Apple TV+ and Apple Arcade (starting this fall).

But even if the shares rise similarly during Wednesday's regular trading session, the stock will remain about 10% below its peak reached almost seven months ago.

Meanwhile, China is another trouble spot for the company, but is showing signs of stabilizing as the country grapples with slowing economic growth and trade tensions with the U.S. IPhone sales in Greater China, including Hong Kong and Taiwan, fell 22% in the just-ended quarter, a slight improvement from the 27% drop a quarter earlier.

Here's a closer look at the quarter's results and Apple's updated capital return program.

The statement also highlighted the strong momentum gained by services, wearables, home and accessories. Cook said the company has 390 million paid subscribers across its current services. Recently, Apple's CEO, Tim Cook was asked "what is Apple's 5G strategy" and "when will Apple launch 5G products?"

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