Aug 3, 2017 ยท 5 minutes

The iPhone company would like you to know it's about more than just the iPhone.

Because, after all, Apple is seeing strong revenue growth in Macs, the App Store, iPads, Apple Music, Apple Watch, iCloud – iCloud! - and yet all investors want to focus on is the iPhone.

Investors have a point. Apple tends to make about two thirds of its revenue from the iPhone. In the last nine months, it's sold 170 million of the handsets for about $660 a piece. And that during a period when it seemed like most of the world was holding off on buying a new iPhone until it sees what Apple can do with the iPhone 8.

And so, in June, when reports emerged that the iPhone 8 could be delayed for a month or two, Apple's stock dropped off from the record highs. And when a new round of reports in July indicated the delay could last as long as the holiday season, the stock sunk even more. Apple began the week down 4.3% from its early June highs, equal to a decline of $35 billion in market value.

On Tuesday, Apple more than made up for that decline in the space of a few minutes, simply by indicating that it wouldn't have a problem shipping the iPhone 8 as early as September, its usual schedule for delivering new smartphones. Of course, Apple didn't say this explicitly - it never comments on upcoming products until they're officially announced - but it signaled it in two ways.

First, Apple said the number of iPhones in its channel inventory was at its lowest level in two and a half years - that is, since the months before the release of the iPhone 7. Apple was suggesting it was confident enough about the iPhone 8 that it was clearing out inventory of older phones.

Second, Apple said it expected revenue in the current quarter to come in between $49 billion and $52 billion, whereas analysts had been expecting $49.1 billion. In other words, Apple was saying revenue could grow as much as 11% last quarter (more than double the 5% revenue growth in the past nine months). That's not going to happen if it's biggest product is hitting production delays.

And lo, Apple traded at an all-time high of $159.75 a share Wednesday (even pushing the Dow Jones Industrial Average, of which it is a constituent stock, above 22,000 for the first time). Tim Cook had saved Christmas after all.

This prompted several analysts on the earnings call to probe for a comment about the iPhone. "There's been a large amount of discussion in blogs and among your component suppliers that the timing this time may be somewhat different and delayed versus past. Your guidance almost seems you're more excited about this iPhone launch versus historically,” one analyst asked. “What do you think is different with this product launch or product availability through the cycle versus what you've seen historically?”

Cook didn't bite. “We have no comment on anything that's unannounced.”

What Apple did comment on at length, however, were all its other products. It's as if the company worries that analysts and investors risk losing sight of the Apple forest while worshipping around the iPhone tree. Much of Cook's own comments in the earnings call centered on non-iPhone products and services that are performing surprisingly well – well enough to shore up Apple's growth during the fallow years of iPhone releases.

iPad revenues rose 3%, with Apple's tablet commanding a 55% market share of the U.S. tablet market. Sales of the Apple Watch were up more than 50% last quarter as Apple alone seems to be performing well in the otherwise troubled wearables market. Mac revenue rose 7% now that the Macbook Pro has upgraded to Intel's Kaby Lake processor.

Perhaps most impressive was Apple's services revenue, which includes the App Store, Apple Music and iCloud. Services revenue rose 22% last quarter to $7.3 billion – which as Apple pointed out would qualify as a Fortune 100 company were it spun out on its own. Apple has 185 million monthly subscriptions of Music and iCloud combined, up from 165 million three months ago.

All of these pale in comparison to the revenue generated by the iPhone, revenue that will start growing even faster this quarter if and when the iPhone 8 begins selling. Cook acknowledged on the call that “there is some pause” in the iPhone revenue for now. “Where that affects us in the short term,” he said, “it probably bodes well later on.”

But as the smartphone market saturates and the tech industry starts to wonder what the next big must-have gadget is going to be to generate sales, Apple already has a stopgap answer: Its so-called ecosystem – that loose confederation of second-tier gadgets and services that rotate around the iPhone and tie consumers into the 700 million or so iPhones in use today.

Apple doesn't need its iPhone customers to embrace all of these ancillary products and services. You may not wear an Apple Watch, but maybe you have an iPad. You might avoid iCloud entirely, but you might subscribe to Apple Music. And you surely add to services revenue through the App Store. Cook's approach is to tighten the web with new features, which is why he's so dang excited about augmented reality.

“iOS will become the world's biggest augmented reality platform as soon as iOS 11 ships,” Cook said this week as he underscored the developer community's embrace of ARKit, Apple's developer tools for AR apps. Asked by an analyst on the earnings call which applications developers are focusing on with ARKit, Cook was more forthcoming than usual.

"Just take a look at what's already on the web in terms of what people are doing, and it is all over the place. From entertainment to gaming, I've seen what I would call more small-business solutions. I've seen consumer solutions. I've seen enterprise solutions. I think AR is big and profound, and this is one of those huge things that we'll look back at and marvel on the start of it.”

If Apple doesn't blow an early lead in AR, it could be enough to keep its revenue machine chugging for a while. Cook is planning to make Apple the early leader in augmented reality, and if he can do that, Apple can keep growing with its existing gadgets and services for some time. Until the company can deliver on whatever new product categories its developing in secret, that may be enough.