Apple gets revenue push from its card and payment app
While touting iPhone 11 as a big hit with consumers because of its various features and high-quality camera, Apple CEO Tim Cook also pointed to Apple Card as a reason the company's newest smartphone sold so well during the holidays.
As with past Apple earnings calls, Cook did not indicate during Tuesday's 2020 first-quarter report exactly how many iPhone buyers jumped at the chance to make monthly installment payments through the Apple Card loaded on the devices, saying only that his company is "thrilled with the continued growth of Apple Card."
The Apple Card also provides cash-back rewards on purchases made in an Apple store.
Regardless of specific reasons, Apple reported iPhone sales of $56 billion for the quarter, marking an 8% increase from $52 billion a year ago.Any type of increase in iPhone sales generally equates to more exposure to the Apple Pay mobile payments system, which Cook said now generates 15 billion transactions a year.
"For Apple Pay, revenue and transactions more than doubled year-over-year, with a run rate exceeding 15 billion transactions a year," said Cook, who did not disclose how many consumers are now using Apple Pay.
Apple enjoyed an "historic quarter" for its Apple services sector, of which Apple Pay is combined with the app store, Apple TV and Apple Music in generating revenue and building recurring payments through subscriptions. Apple services revenue came in at $12.7 billion, a 17% increase over last year. It generated 14% of Apple's total sales in what amounted to a record-setting $91.8 billion, or 9% over last year, Cook said.
Apple Pay has seen expanded use in going live in parts of China as well as becoming a common payment method for mass-transit systems in London, Chicago, Portland and some New York City stations, Cook added.
Early last year, Cook touted payments on transit systems as the catalyst for reaching the company's goal of hitting 10 billion transactions for Apple Pay. As such, Cook was especially glowing in his report on Apple Pay surpassing that goal.