Apple’s path to success beyond the iPhone gets clearer

Mike Murphy for Quartz:

The iPhone is still far and away Apple’s most important product today, but there may be a time soon when it goes the way of the iPod.

MacDailyNews Take: No. It won’t be soon. Apple will continue to sell tens of millions of iPhones each quarter for many, many years.

Apple announced its third-quarter earnings July 30 (its year ends in September)… Even with slowing iPhone sales, Apple was able to (just barely) grow revenue for the quarter year-on-year, ending a multi-quarter slide. And under the surface, there are a few signs that point to a future where the company can still be successful, even without the iPhone at the helm.

First, the company’s services business — sales of apps, games, videos, AppleCare, and Apple Pay fees — has been the dominant story for Apple over the past few years. The business brought in over $11 billion in revenue in the quarter alone, and on its own is the size of a Fortune 100 business.

But CEO Tim Cook highlighted another trend developing in Apple’s burgeoning wearables business. Sales in its accessories category — which includes Beats headphones, cases, and HomePod speakers, as well as the Apple Watch and AirPods — are skyrocketing. The category grew by nearly 50% over the same period last year, and at $5.525 billion in revenue, sales came within $0.3 billion of overtaking the Mac as Apple’s second-largest hardware business…

There have been rumors and reports that it plans to release a set of AR glasses as early as 2020, and a longtime company veteran has just been put in charge of the AR hardware team. Much like early Apple Watches, it seems that much of the computing power for these glasses would be offloaded to a wirelessly paired iPhone.

Apple has been trying to shore up falling iPhone sales through investment in the services it offers, but it’s possible that what comes after the iPhone may well have started out life as an accessory to the iPhone.

MacDailyNews Take: Apple is in transition from riding the most successful product of all time to diversification (which should be music to AAPL investors’ ears).

That’s also great news for fans of Apple’s products and services as it ensures the company will be around for a very long time making Macs, iPhones, iPads, Apple Watches, Apple TVs and providing myriad services like Apple News+, Apple TV+, Apple Card, AppleCare, Apple Arcade, etc.

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