Apple’s iPhone sales are still sputtering while the company tries to offset the decline by milking more money from digital services such as music.
The latest evidence of the iPhone’s waning popularity had been expected. Even so, the confirmation in Tuesday’s fiscal third-quarter earnings report underscored the challenges facing a company that has been riding the smartphone revolution for the past decade.
The iPhone’s downturn is the main reason Apple’s profit for the April-June period fell 13% to $10 billion.
The good news is Apple has several ways it can still make money from the 900 million iPhones in use today. Besides selling new models to current iPhone owners after the current devices eventually wear out, Apple has positioned itself to make billions of dollars more from music, video and gaming subscriptions, maintenance plans and commissions from apps selling their own wares on iPhones.
The bad news is that Apple has still been relying on the iPhone for more than half its revenue so this year, and the company hasn’t proven it can be as adept peddling digital services as it has been making sleek devices. For instance, Apple’s 4-year old music streaming service still lags Spotify. Apple is preparing to launch a video streaming service more than a decade after Netflix pioneered the concept.