Apple Card helps provide 'historic' earnings, even as consumer spending fell

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Apple Card helped push services-category revenue to new heights for Apple, which reported double-digit growth in its product and services segments for the third quarter of 2020.

Though the company did not provide specific figures for Apple Card use or adoption during Thursday's earnings conference call, Apple CEO Tim Cook and chief financial officer Luca Maestri both cited its role in helping Apple reach record services growth at $13.2 billion for the quarter.

In addition, the monthly installment payment plan Apple introduced in June through the Apple Card attracted considerable consumer interest, Cook said. The installment plan targets customers buying many of Apple's products with the hope to push sales of iPads, Macs and AirPods. It followed the same plan the tech giant put in place for iPhones last year, with those sales offering 24 months of no interest.

Still, Apple Card did not escape the fate other cards endured when the global pandemic took hold.

"We saw consumer spending, as the shutdowns occurred and store closures occurred, we could see that fall across the Apple Card," Cook said. "It affected the categories that you would guess the most, like travel and entertainment, but overall when you pull the lens out on the Apple Card we are very happy with the number of people who have Apple Card."

Based on what Apple executives have heard from experts, the Apple Card's launch "is the fastest rollout in the history of credit cards, and we feel very good about that," Cook said.

"When you pull the lens out on the Apple Card we are very happy," said Apple CEO Tim Cook.
"When you pull the lens out on the Apple Card we are very happy," said Apple CEO Tim Cook.

However, for the first time since Apple Pay debuted in 2014, the mobile payment method was not mentioned during the third-quarter earnings call.

In early May, Apple was touting the rollout of Apple Pay through the four largest banks in Australia, a development that the company said was quickly providing an increase in contactless payments in the country during the coronavirus pandemic.

Though increases in digital transactions via Apple Pay or through the Apple Card were expected, considering the demand for online or contactless transactions from both merchants and consumers during the coronavirus pandemic, Cook focused instead on the uncertainty that comes into play with physical store closings during the pandemic.

Still, he was quick to label the third-quarter earnings as "historic" and a "record June quarter." The Cupertino, Calif.-based company reported quarterly revenue of $59.7 billion, an 11% increase from the same period the previous year. Apple enjoyed double-digit growth in both products and services, as well as growth in each geographic segment, Cook added.

Apple headed into the second and third quarters of 2020 after also reporting a highly successful first quarter in late January, about two months before the pandemic had taken hold in the U.S. and across the globe.

Cook often made note of Apple's $100 million Racial Equity and Justice initiative during the call, and the company's commitment to be carbon neutral by 2030 across every product Apple makes.

He opened the earnings call with a tribute to the late Congressman John Lewis, whose funeral was held Thursday. "We lost a hero who walked amongst us," Cook said, noting he knew Lewis well and considered him a friend.

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Credit cards Coronavirus Apple Apple Pay Digital payments Earnings Tim Cook
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