Apple reported a strong Q3 despite stagnant iPhone shipments (AAPL)

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Apple on Tuesday reported solid results in its fiscal Q3 earnings, reaching $53.3 billion in revenue, a 17% growth year-over-year (YoY) from $45.4 billion in Q3 2017. This marks a promising improvement in growth compared to Q3 2017, when revenue grew just 7% YoY. Meanwhile, global iPhone shipments reached 41.3 million devices in Q3, relatively flat from 41 million the same time last year.

Apple Quarterly Revenue and YoY Growth

Other Products and Services’ acceleration shows promise amid stagnant iPhone shipments:

  • Apple’s Services are becoming a considerable part of overall business. Services, which includes revenues from the App Store, AppleCare, Apple Pay, licensing, and other services, reached $9.5 billion in revenue for the quarter, up 31% YoY from $7.3 billion the year prior. And the Services segment is continuing to accelerate, showing higher growth than Q3 of last year, which experienced 18% YoY growth.
  • Other Products continues to accelerate as a revenue stream. Revenue from Other Products — which includes the Apple TV, Apple Watch, Beats products, the iPod, and Apple-branded and third-party accessories — grew 37% YoY, accounting for $3.7 billion, compared to $2.7 billion in Q3 2017. And Other Products is accelerating, as it grew 31% YoY for the same quarter last year.

Apple’s continued improvements to its voice and messaging platforms will help bolster growth in its Other Products and Services segments going forward. For instance, Apple launched Business Chat for Messages this past March alongside iOS 11.3, which allows businesses and brands to engage with consumers over Messages — and the company is continuing to add businesses and use cases as the platform matures.

Apple is also introducing significant improvements to Siri with iOS 12’s impending Fall release. For example, Siri Shortcuts will allow users to complete a range of instructions utilizing both Apple and third-party apps from a single word or phrase command, rather than using multiple commands to reach the same goal.

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