Apple - Wearables is a Huge Market

Apple reported earnings of which my colleague Paul covered in detail here. The stock closed up over 4.5% on the following trading day, adding the market value of Dell in just one trading session. Why Dell? Well according to Prof. Scott Galloway, my hero, 15 years ago at Davos, Michael Dell (basically a father figure to me) said that Apple should be sold for scrap, oops!

Here's what the animated Scott Galloway said on the podcast. [emphasis mine]

How did Apple do this? The revenues from the Wearables business increased by a staggering 48% year-on-year, from $3.7 billion to $5.5 billion now constituting over 10% of Apple's total revenues, just a smidgen from being a fortune 500 company on a stand alone basis based on AirPods and the Apple Watch sales.

How can we tell that the Wearables business is getting renewed emphasis? On the earnings call Tim Cook and his people mentioned Wearables 12 times as compared to 4 times in the previous quarter. It's unusual that it missed on its Services business, the recurring revenues side which includes the App Store, Apple Music, Apple Pay, Apple Care etc.

I would've thought that based on that announcement that if the Services revenues missed estimates, the stock would've been affected negatively as a result because the Services business is more important than the Wearables, but guess what? I was wrong! It appears that Apple is immune to any economic anxiety at this point.