Apple shares rally as firm outlines life beyond iPhone

SAN FRANCISCO • Apple Inc convinced investors that life beyond the iPhone won’t be so bad, sparking a relief rally in the stock.

The Cupertino, California-based company reported its first holiday-quarter sales decline since 2001 as revenue from the iconic handset tumbled 15%. But CEO Tim Cook and CFO Luca Maestri focused on a growing services business and rising sales of other devices.

Mac revenue grew 9%, while iPad sales climbed 17%. The company’s Wearables business, which includes the Apple Watch and AirPods, surged 50%.

On services, the Apple executives pointed to increased usage of Apple Pay and Apple Music. They also made a new prediction: The number of subscriptions will top half a billion by 2020, up from 360 million now. Without getting into detail, Cook suggested Apple will get further into the original video content business.

The company reported other growth stats on specific services:

The Apple Pay app handled 1.8 billion transactions in the holiday quarter, twice the volume in the year-ago quarter. Apple News had 85 million monthly active users in the period.

Cloud services revenue, which comes from iCloud storage upgrades, was up more than 40%. Apple Music topped 50 million subscribers, generating record music-related revenue.

Apple shares rose 5.5% in extended trading on Tuesday. The company had lost about a third of its market value since October as investors adjusted to the reality of a saturated smartphone market and the end of growth for Apple’s most-important product. — Bloomberg