Apple reports decline in quarterly revenue and sales of iPhones
Print Edition
APPLE sold more than 51 million iPhones in the first three months of this year — and that’s the problem.
That’s 10 million fewer iPhones than the tech giant sold during the same quarter a year ago. As a result, Apple has reported its first drop in quarterly revenue in 13 years — and the first-ever year-on-year decline in iPhone sales.
The slide is putting more pressure on Apple and CEO Tim Cook to come up with its next big product.
Cook, of course, has problems many corporate bosses would kill to have. Despite the decline in sales, Apple managed to rack up US$10.5 billion in profit for the quarter.
“The future of Apple is very bright,” Cook told analysts on a conference call on Tuesday.
But Apple is battling perceptions that its latest iPhones aren’t that different from previous models, at a time when overall smartphone sales are slowing around the world. Apple also sells iPads, Mac computers and other gadgets, but nearly two thirds of its US$50.6 billion in quarterly revenue came from iPhones.
“They need to come out with that next great product,” said Angelo Zino, a financial analyst with S&P Global Market Intelligence.
Zino said that while he is optimistic about the company’s future, “Apple absolutely needs to start diversifying their revenue base.”
Overall, the company’s revenue in the January-March quarter was down 13 percent from a year earlier.
And the company surprised analysts by forecasting another revenue drop of 13 percent or more in the current quarter.
Apple hasn’t reported a year-on-year sales decline since 2003, when the iPod was still relatively new and the iPhone didn’t exist.
Since then, the iPhone and other products have propelled the company’s stock value from US$5 billion to US$579 billion, making it the most valuable public company in the world.
Innovations abound
Despite the quarterly decline, Chief Financial Officer Luca Maestri defended the iPhone business. “We think we can continue to bring a lot of innovation to the market,” he said of future models, while adding that Apple is working to expand other lines of business.
Apple’s revenue for the quarter included US$6 billion from online services, apps and other software, he noted. That’s up 20 percent from a year earlier.
Analysts agree the figure could rise further, given that there are more than 500 million iPhones in use.
Many were hoping the Apple Watch would be the company’s next big hit when it went on sale a year ago.
Apple hasn’t revealed sales figures for the watch, but most analysts estimate the company has sold 12 million or more, producing well over US$5 billion in revenue. That’s more than twice the number of iPhones sold in the first year after the product’s introduction in 2007.
While some owners say they’re delighted with the Apple Watch, others have voiced disappointment that it doesn’t do more. And critics say it hasn’t ignited consumer passions in the way the iPhone became a must-have product.
Apple is also said to be working on other new products, such as virtual reality headsets and even electric cars.
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