Apple Q3 2019 earnings: Wearables get close to surpassing Mac

Apple's wearables, home, and accessories business is now nearly as big as its Mac business, according to the company's newest earnings report.

Net sales for that division, which includes products like the Apple Watch and AirPod, reached $5.5 billion in the quarter that ended on June 29. The Mac, by comparison, reached $5.8 billion in net sales in the same time period.

The company's wearables unit has been steadily gaining steam, as CEO Tim Cook said last quarter that it's now the size of a Fortune 200 company.

Net sales for Apple's wearables, home, and accessories division surpassed that of the iPad, and is approaching that of the Mac, the company said as part of its third quarter earnings report on Tuesday.

Apple does not break out net sales for individual products like the Apple Watch, AirPods, and HomePod, but instead lumps them into broader category called wearables, home, and accessories.

During the financial period that ended on June 29, net sales for Apple's wearables, home, and accessories division hit $5.5 billion, while the iPad reached $5 billion in net sales and Apple's Mac business hit $5.8 billion in net sales. Apple said this was its biggest June quarter ever in a press release announcing the results, adding that this was partially driven by “accelerating growth” from its wearables unit.

That also represents a noticeable jump from the same period one year ago, when Apple's wearables, home, and accessories division was responsible for $3.7 billion in net sales.

It provides further evidence that Apple's wearables, home, and accessories business is gradually becoming just as critical as its Mac division. Last quarter, the category that includes Apple's smartwatches and accessories reached $5.1 billion in net sales, while the Mac accounted for $5.5 billion.

Apple's wearables, home, and accessories business has been steadily gaining steam. Last quarter, Apple CEO Tim Cook said the company's wearables division had reached the size of a Fortune 200 company.

Although Apple has not provided specific sales data for these products, third-party reports have suggested that the Apple Watch and AirPods are selling well.

With the AirPods, Apple accounted for 60% of the truly-wireless earbud market in the fourth quarter of 2018, according to Counterpoint Research. Meanwhile, the Apple Watch was responsible for 51% of the global smartwatch market in the fourth quarter of 2018, says a report from Strategy Analytics.

Apple released a new pair of AirPods in March that support hands-free Siri input, and is expected to launch another new model later this year. The company has also historically launched the latest version of the Apple Watch in September alongside new iPhones. Apple also refreshed its iPad mini and iPad Air tablets earlier this year around the same time it launched the new AirPods.

Thr growth in Apple's wearables, home, and accessories business also comes as the company has grappled with stalling iPhone revenue. Net sales from the iPhone reached $26 billion in the quarter that ended on June 29, marking a decline from the $29 billion in net sales it brought in during the same period one year ago.