Apple says Services performed above its own expectations in Q2

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Apple's Services rose 26.6% year on year during the second fiscal quarter of 2021, beating the company's predictions, chiefly because of the impact of the coronavirus and work from home trends.

During its latest earnings call, Apple reported that its overall 26.6% rise in revenues from Services, which hit $16.9 billion, had been boosted by the COVID pandemic. Certain services such as AppleCare+ and advertising were affected by the lack of retail stores, but others all gained.

"Our services business did better than what we were expecting when we had the last call in January," said CFO Luca Maestri. "It was stronger across the board."

Services Graph

"One of the things that we've noticed is that throughout COVID was that obviously digital services have done very well," he continued. "And then we've had a couple of categories, like Apple Care, because many of the points of sale and stores were closed and advertising because of the reduced economic activity."

"[Those] were negatively affected during COVID," said Maestri. "[However] during the March quarter we've seen a return to growth on Apple Care."

Maestri also said that Apple's advertising business had suffered during the coronavirus pandemic, but that the company has seen that beginning to change. "Consumer sentiment has improved," he said, "and advertising is coming back."

Apple would not provide guidance for future growth expectations, but did say that the company is particularly positive about Services.

"As we are adding new services, are we improving the quality of the existing services," he said, "and so when we look at all these fundamental factors of our services business, obviously we feel very good about it."

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