Apple Week in Review: Slumping iPhone Sales and a Rising Share Price

Apple may still have issues selling iPhones, but that doesn’t seem to faze investors.

The company said during its second-quarter earnings release this week that iPhone sales fell 17% year over year to $31 billion after sluggish demand carried over from 2018. The decline in iPhone sales helped to push Apple’s profit down 16% to $11.6 billion.

Investors, however, didn’t seem bothered that Apple’s most significant and most crucial division continues to struggle. The company’s shares rose this week and now hover around $212—up from $205 at the start.

Investors were pleased with the growth in Apple’s services division, which includes App Store sales, Apple Music streaming, and other services. Apple’s services unit posted $11.5 billion in second-quarter revenue, up 17% from the $9.9 billion in sales it had at the same time a year ago.

This is Fortune’s latest weekly roundup of the biggest Apple news. Here’s last week’s roundup.

Apple’s stock price jump was enough to help the company sidestep controversy over its recent decision to remove parental control apps from the App Store. And along the way, we heard loud and clear from industry analysts that in the smartwatch business, Apple Watch is the clear leader.

Here’s more major Apple news:

1. Apple watchers were focused squarely on the company’s second-quarter earnings. Apple had $58 billion in sales, a 5% drop compared to this time last year. And although the company tallied $11.6 billion in profit, that was down 16% year over year.
2. Apple’s shares climbed this week despite the poor quarterly performance. However, several analysts noted the iPhone division is showing signs of resurgence, thanks to strong sales in March that carried over to April. Meanwhile, analysts expect Apple’s services business to grow as Apple’s price cuts in China on its devices seem to have boosted sales in that critical market.
3. Famed investor and Berkshire Hathaway chief Warren Buffett chimed in on Apple’s latest quarter. The owner of more than $50 billion in Apple stock, Buffett told CNBC that he was “pleased” with Apple’s earnings, restating that the numbers firmly support why his company has such a big stake in Apple.
4. Also, Qualcomm told its investors this week the chipmaker anticipates generating an additional $4.5 billion to $4.7 billion this quarter thanks to its recent legal settlement with Apple. The companies were in an ugly two-year patent legal dispute, but settled the case last month. The settlement includes a six-year licensing agreement allowing Apple to include Qualcomm chips in future devices.
5. Even though Apple didn’t break out Apple Watch market share data in its latest earnings call, that didn’t stop industry researchers from doing it. Apple owned 35.8% of the global smartwatch market last quarter, easily topping second-place Samsung’s 11.1% share, market researcher Counterpoint reports. The Apple-tracking site MacRumors said the researcher didn’t share unit sales data. However, Counterpoint did say that Apple Watch shipments had risen 49% year over year.
6. Apple’s first-quarter iPhone shipments this year fell more than 30% from 52.2 million units in the first quarter of 2018 to 36.4 million units in this year’s quarter, according to researcher IDC. Market leader Samsung shipped 71.9 million units during the same period, down 8.1% at the same time a year ago, according to IDC. Huawei’s 50.3% year-over-year jump helped the company lift shipments to 59.1 million units. Apple didn’t share iPhone unit sales in its latest earnings report.
7. Apple’s week kicked off with a dispute over the company’s recent decision to remove several favorite parental control apps from its App Store. App developers told The New York Times that Apple removed their programs, which allow parents to monitor child smartphone usage and prevent access to certain apps or websites, to boost its own alternative, Screen Time. Apple countered that it removed the apps to protect user privacy. Apple added that third-party parental control apps that protect user privacy are still available in its App Store.

One more thing…Apple said this week that demand for its AirPods wireless earbuds continues to be reliable. The company said that it’s doing its best to manufacture enough units to meet what it called “incredible customer demand.”

[“source=fortune”]