Apple sold 40.4 million iPhones in the quarter ending on June 25, down 15 percent from a year earlier. Perhaps most worrying was the 33 per cent drop ion Apple sales in China, which is an area where most tech companies are targeting growth. Lower average selling price of Apple devices (especially iPhone) was one of the key reasons for the reduced margins. “We’re looking forward to opening retail stores in India down the road and we see huge potential for that vibrant country”.
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Although the iPhone and Apple Watch get most of the attention, Apple says its push into the enterprise continues.
The drop was driven entirely by the iPhone, Apple’s top-selling product by far. iPhone unit sales declined 15% year over year to 40.4 million.
We never set out to make the most, but we’ve always set out to make the best products that make a difference.
The Company posted quarterly revenue of $42.4 billion and quarterly net income of $7.8 billion. This comes as little surprise given the gargantuan success of Pokémon Go in the last several weeks, which is slated to earn the Cupertino, California-based firm a staggering $3 billion in revenue over the next couple years. As much as 63% of sales were from the global markets. But some analysts are warning of tepid sales even then, citing industry rumors that Apple may wait until 2017, the tenth anniversary of the iPhone’s release, before making dramatic improvements to its signature smartphone.
With iPhone sales and profits sliding, Apple Inc on Tuesday sought to highlight its growth in services as it seeks to reduce dependence on its main cash driver.
Apple is also confronting a slump in demand for its newest gadget, a smartwatch introduced to great fanfare a year ago.
“It is very clear that there are some signs of economic slowdown in China, and we will have to work through them”, Chief Financial Officer Luca Maestri told Reuters in an interview.
The use of mobile payment services like Apple Pay is expected to grow quickly over the next couple years.
India is expected to overtake the United States as the second-largest smartphone market next year with robust annual growth, a Morgan Stanley report said recently. Other products like iPad, Mac, and small gadgets seem to have a lesser impact on the revenue.
Apple said its services revenue rose 19 percent year-over-year.
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“To keep things in perspective, when we look back on our accomplishments in this segment over the last couple of years, they are truly remarkable”, he said, noting that Apple’s total revenue in China increased by 55 percent to almost $40 billion in the first three-quarters of this fiscal years from the same period two years ago. Mac sales have slid by half a million units, and while the introduction of the higher-priced iPad Pro has led to a spike in revenue growth, sales of Apple’s tablets are still down by nearly one million, although channel inventory has been reduced by 500,000 units.
