Apple released its Q2 financial results today, and as you can imagine, things have been rough for the company. It goes without saying that things have been rough for just about every company, but Apple was hit hard early on with disruptions to both its supply chain and one of its largest markets as the coronavirus outbreak began to spread across China.
Still, Apple managed to find some good news. The company's revenue for the second quarter was $58.3 billion, which was far below Apple's estimated range of $63 to $67 billion, but exceeded investors' expectations. The company even reported growth of one percent over the second quarter of last year.
The forecasts were pretty dismal as a result of the current economic environment, as well as the fact that Apple has had to close both production facilities and retail locations over the first part of the year. Apple's stores, outside of mainland China, mostly remain closed, though the company told Bloomberg that it would open stores in Austria and Australia in the next few weeks.
Apple's services division, however, reached a record $13.3 billion. To put that in context, that's more than the company sells in Macs and iPads combined. Maybe more important than the dollar amount itself is the fact that those services, which include Apple TV+, the App Store, Apple News, and Apple Music, made up almost 23 percent of the company's total revenue for the quarter.
"Despite COVID-19's unprecedented global impact, we're proud to report that Apple grew for the quarter, driven by an all-time record in Services and a quarterly record for Wearables," said Apple's CEO, Tim Cook, in a statement.
Sometimes the best thing you can do is to exceed expectations. That's true in many areas of life, but it's especially true right now when it's almost impossible to predict what comes next. Nothing is normal right now, which is actually illustrated by Apple's results.
The company said that Apple News has reached 125 million users, and its FaceTime and iMessage services have seen record use. That makes sense. In a world where we're mostly stuck at home, the technology that helps us stay connected is more valuable than ever. Apple is even testing new features in FaceTime to make it easier to use for group meetings.
In reality, the bet Apple made on its services and wearables divisions isn't new. As smartphones have reached a saturation point, and iPhone growth has slowed, the company has naturally turned towards those divisions to better position it for the future. And, now that it looks likely that Apple will delay its 5G iPhones, expected this fall, it is counting on both to drive sales.
There's actually a lesson here for every business. Right now, it's hard to know what to expect. It's even harder to control what is happening around you. In many cases, we don't even know how long it will take to get through this crisis, or what the world will be like when we do.
Focus, instead, on what you can do right now to best position yourself for whatever comes next. It might be the thing that got you this far, but there's just as much chance that it won't be. That doesn't mean it has to be something new, but it might be different.
Apple became the company it is today because of the iPhone. It just may make it through this pandemic in relatively good shape because of something entirely different--something it started building years ago.