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Apple's diversification strategy pays off

Apple’s revenues hit a solid $53.8 billion in the last quarter of which the iPhone contributed $26 billion and, in response, the company’s shares have jumped. The tech giant is almost back to a valuation of $1trn.

The announcement has certainly calmed nerves on Wall Street about Apple, which was able to point to not only a strong performance from the iPhone but to solid contributions from services at $11.5bn and wearables at $5.5bn. The latter up over 60 percent.

“We were especially pleased with the double-digit increase in Services driven by strong growth from the App Store in China,” Chief Executive Tim Cook told a conference call.

For many analysts Apple’s transformation of its services business, along with a strong product cycle, suggest that the company’s future looks a strong one.

In mainland China, despite the ongoing trade war, the overall number of Apple device users has continued to grow helping to drive services sales.

Apple has also announced that will be launching its own credit card this month, in a move that highlights its strategy of diversifying its business model.

The Apple Card will include a user interface that shows customers where each purchase was made and the amount of the transaction. It will break down purchases into categories including entertainment, food, and shopping, and include cash back incentives rather than a points system.

"This was our biggest June quarter ever, driven by all-time record revenue from services, accelerating growth from wearables, strong performance from iPad and Mac and significant improvement in iPhone trends,” said Cook.

Apple appears to have overcome a difficult start to the year.

Neil Tyler

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