Apple CEO Cook Says ‘Pandemic Cut Both Ways’ on Services Gains
(Bloomberg) -- By forcing people to stay at home and spend more time consuming entertainment and other digital fare, the global coronavirus pandemic gave a boost to Apple Inc.’s content services like the App Store and Apple TV+, Chief Executive Officer Tim Cook said.
At the same time, advertising and AppleCare repair services took a hit, Cook said in an interview with Bloomberg Television.
“The pandemic cut both ways,” he said. Even so, Apple’s services revenue increased 16.6% to $13.3 billion last quarter, a record. The company reiterated that it is on track to double fiscal 2016 services revenue by the end of 2020.
Apple generates sales from ads that run on the Apple News app and the App Store. But many businesses, keen to cut costs after the virus cratered demand, slashed their advertising budgets. That’s hurt tech industry stalwarts including Facebook Inc. and Alphabet Inc.’s Google. Apple wasn’t spared.
Customers also cut back on use of AppleCare after Apple shuttered stores, leaving nowhere to bring in broken or damaged phones and other devices. Customers can subscribe to AppleCare protection for their products, but also often need to pay for part replacements like cracked screens or to fix water damage in a laptop. Often that happens in stores.
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