Wearables are the surprise MVP of Apple's latest earnings report
iPhone is too good... You're not replacing/upgrading your pocket's best friend often enough, and that's a problem for Apple. But now it's found 2 saviors. 1 was expected, 1 is a surprise:
- Services (sales up 18% last quarter): You knew about this one — Apple's made $46B over the past year in sales of iCloud, Apple Music, etc. And (starting today) Apple TV+.
- Wearables, Home, and Accessories (up 54%): Apple's AirPod and Apple Watch division is living its best life — it's grown over 50% for two-straight quarters.
Apple's side hustles are entire companies... That Wearables division has the same sales as Starbucks. Services is bigger than Delta. And since 3/4 of Apple Watch sales are 1st-time Watch buyers, there's room to grow. But Apple's getting greedy — CEO Tim Cook thinks new $249 noise-cancelling AirPod Pros complement the regular ol' $159 Airpods. He thinks you should buy both.
That explains Apple's "record high" situation... iPhone sales have boringly dipped for four-straight quarters, but Apple's stock has never been higher. It's creatively replaced its lost biz with a new one focused on covering your body real estate with Wearables. As a reward, Apple's enjoying its $1.1 trillion market cap — making it the most valuable public company in the world (again).