Apple’s services slowdown in Q3 potential concern for investors

Apple CEO Tim Cook speaks at Apple’s Worldwide Developer Conference (WWDC) at the San Jose Convention Center in San Jose, California on Monday, June 4, 2018.

Josh Edelson | AFP | Getty Images

For over half a decade, Apple has been touting its services business as a growth engine that will make up for smart phone saturation and provide healthier profits to investors.

That story may be losing some of its potency.

In its quarterly earnings report on Thursday, Apple beat on the top and bottom lines. But the services business was a weak spot in an otherwise better-than-expected report. The unit grew 12% from a year earlier to $19.6 billion, trailing the $19.7 billion average analyst estimate, according to Refinitiv.

It was also the slowest growth rate since the fourth quarter of 2015 for the services unit, which includes Apple Music, iCloud storage, App Store revenue, Apple Pay and

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Fails to add broadband subscribers

Comcast┬áreported second-quarter revenue and earnings that topped analyst estimates, but the cable provider didn’t add broadband customers in a quarter for the first time ever.

Comcast’s high-speed internet customers in the quarter were flat, trailing the 84,000 average analyst estimate, according to FactSet. The company’s shares fell more than 9% Thursday morning.

Comcast is seeing growing competition for high-speed broadband, its most lucrative product. For more than a decade, the cable industry has dominated the home broadband market, but wireless companies such as T-Mobile are now competing by offering 5G home internet products. T-Mobile added 560,000 broadband users in the second quarter, well above its first-quarter total of 338,000.

“Mobile substitution will eventually stabilize,” Comcast Chief Executive Officer Brian Roberts said during the company’s earnings conference call. Still, Comcast said broadband losses have continued early in the third quarter, noting a loss of about 30,000 broadband customers in July.

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