By way of contrast, Apple in the same quarter a year-ago posted revenue of $49.6 billion and a profit of $10.7 billion.
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Apple’s total revenue for the quarter, $42 billion, was down 15 percent from the year before, and sales were slightly down as total iPhone and iPad units sold dropped 15 percent and nine percent respectively. Even the launch of the iPhone SE couldn’t stem this drop, which Tim Cook remarks as a real power play to budget-minded consumers. That’s fallen to a 21 per cent share as revenue declined 33 per cent. For a country with billions of people, growing in this huge market is a crucial goal for Apple – but it also faces greater competition from homegrown (and cheaper) rivals.
If iPhone and iPad owners are upgrading less regularly, which appears to be the case amid Apple’s vow it is welcoming more and more switchers and first time smartphone owners, then purchases of apps, music, storage plans and payments through Apple Pay are going to become increasingly important to Apple’s bottom line. But the iPhone remains its best performing device, especially considering that the iPad pushed just 10-million units.
The Apple Stock has risen 6.58% in after-hours trading, set to open higher today on the stock market.
Chief Financial Officer Luca Maestri said Apple’s performance had topped his expectations in a quarter weighed down by tough foreign exchange rates and hard comparisons with blockbuster iPhone 6 sales from the previous year.
Apple’s quarterly net profit fell 27 percent to $7.8 billion, while revenue of $42.36 billion beat analysts’ average estimate of $42.09 billion, according to Thomson Reuters I/B/E/S.
This translates to a US$1.42 (AU$1.89) per diluted share, compared to the US$1.85 (AU$2.46) per diluted share recorded for the third quarter of the last fiscal year.
“The growth was broad-based with App Store revenue up 37% to an all-time high”, Cook said in a conference call.
Although the numbers confirm that Apple’s overall revenue and sales of its main cash cow were down for the second quarter in a row, Wall Street was upbeat on the news that sales weren’t as poor as expected.
“We returned over $13bn to investors through share repurchases and dividends, and we have now completed nearly $177bn of our $250bn capital return programme”, he said.
A revenue revival is hoped from the new demand that will follow the new flagship smartphone iPhone 7, due for launch in the next few weeks, reports The Wall Street Journal.
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“Since Apple makes about two-thirds or more revenues on its iPhone sales, declines are particularly troubling there”, said Jack Gold, a technology analyst at J. Gold Associates. The second-quarter iPhone sales were also down sharply-by 32 percent-from the 74.78 million in the first quarter of 2016.
