Editor’s note: Apple’s revitalized Mac PC business and sustained success in its Service segment powered the company’s revenue growth in 1Q17, says Technology Business Research Analyst Jack Narcotta.

HAMPTON, N.H. – A sixth consecutive quarter of strong year-to-year revenue growth in Apple’s Services segment and a resurgent Mac PC business enabled Apple to increase overall revenue despite flat performance from the company’s iPhone segment and ongoing challenges in its iPad business.

In calendar 1Q17/fiscal 2Q17 according to its earnings report issued Tuesday, Apple generated $52.9 billion in revenue, a gain of 4.6% year-to-year, its second consecutive quarter of overall revenue growth following declines in calendar quarters 1Q16, 2Q16 and 3Q16.

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Services segment revenue growth Apple demonstrated its near-unparalleled ability to monetize user engagement, and a second consecutive year-to-year revenue rebound in its Mac PC business shows the new MacBook and MacBook Pro have accelerated Mac PC refreshes, at least in Apple’s installed base. Services revenue surged upward 17.5% year-to-year to $7 billion in calendar 1Q17; Mac PC revenue and unit shipments climbed 14.4% and 4.1% year-to-year to $5.8 billion and 4.2 million, respectively. Services and Mac PC revenue growth in the Americas and EMEA also helped offset most of the impact of revenue decline in Greater China.

There are signs that Apple’s iPhone business is experiencing deferred demand as its loyal base of customers awaits the anticipated release of the iPhone 8 later this year, likely in September 2017. iPhone unit shipments declined a nominal 0.8% from calendar 1Q16 to 50.8 million, but a greater mix of iPhone 7 Plus models in overall iPhone mix boosted iPhone ASP, helping lift iPhone segment revenue 1.2% year-to-year to $33.2 billion.

While growth in Mac PC and Services reduces the burden on the iPhone as Apple’s (Nasdaq: APPL) revenue engine – the iPhone accounted for 62.9% of Apple’s total revenue in calendar 1Q17 – sustaining demand for the current stable of iPhones will be necessary to fill gaps should Services and Mac PC revenue growth rates slow in calendar 2Q17 and 3Q17.

(C) TBR