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Apple wearables become the growth engine of the company



Simone Marchetti wears Apple AirPods during Milan Fashion Week in Milan, Italy.

Melody Jeng | Getty Images

Apple is often referred to as the "iPhone company," as this is the product that has been delivering the bulk of Apple sales for years.

Since 2012, the iPhone accounts for more than half of Apple's revenue quarter. But this series broke off when Apple announced profits on Tuesday – instead, Apple's largest product accounted for only 48% of total revenue, and iPhone sales were down 1

2% year-on-year.

However, Apple exceeded expectations and total sales increased from a year ago.

The main product category that absorbs slack? What Apple calls "wearables" – the category that includes Apple Watch, AirPod's Wireless Earbuds and Beats headphones.

Apple CEO Tim Cook called it a "blowout quarter" for its wearables product category and said there was a "phenomenal demand" for the $ 159 AirPods.

Apple announced that Wearables, Home and Accessories sales totaled $ 5.53 billion in the last quarter. This was a massive blow. Analysts surveyed by FactSet expected sales of $ 4.59 billion, almost a billion less than the actual figure.

It's difficult to compare to last year as Apple rearranged its product categories at the end of last year, but Apple Watch and Earphones used to be in the Other Products category, totaling $ 3.7 billion amounted to the period last year.

"As I mentioned at the beginning, it was another sensational quarter for wearables, where growth accelerated to well over 50 percent," Cook said in a conference call with analysts to discuss the company's results.

Apple does not share sales This is no longer true for products like Apple Watch. Therefore, it is not clear which products drive growth. However, Cook said that wearables alone – and not accessories – are "well over" 50% and the size of a Fortune 200 company over the last 12 months. (The 200th company of the Fortune 500 is General Mills with a turnover of 15.74 billion US dollars in the last year.)

Perhaps the biggest positive factor for the future growth of Apple is that the competition in the categories Smartwatch and wireless earphones is less strong than smartphones.

In the fourth quarter of 2018, the final quarter for which estimates are available, Apple was by far the largest wearables company, with 16.2 million units shipped, according to IDC data.

Next, Xiaomi followed with 7.5 million units, mainly shipped to China.

"We have the wearables sector, which is developing well," Cook said next to the iPhone on a question about the future of Apple. "We stayed with them when others might not, and really put a lot of energy into this and a lot of R & D and today we are in a very good position to find out what's coming next."


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