Demand for iPhones has been on the decline since the second quarter when the firm reported the first drop sales since the 2007 iPhone launch. Along with a windy world economy, sagging iPhone sales were chiefly to blame. Apple faces competition from brands including Samsung and Huawei.
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But the biggest bright spot in the company’s report was a 19 percent sales jump for the segment that includes iTunes, Apple Music, the App Store and services like Apple Pay and iCloud storage.
So, as people find it hard to justify iPhone upgrades, Apple’s services are for the first time taking the spotlight, and that might push the company to focus more on the segment altogether. On average, analysts projected $45.5 billion.
In spite of what on the surfafce look like negative results, Apple actually beat forecasts with some believing that the company is selling too numerous cheaper iPhone SE, that it is devaluing their other products and driving down demand for more expensive iPhones.
The figure comes from sales of Apple’s device, particularly that of the iPhone SE; which Cook believes has an effective strategy as it has met the needs of customers who were looking for a 4-inch phone and modern hardware. But an iPhone sales bump isn’t likely until Apple releases successors to the 6S and 6S plus later this year. Analysts surveyed in advance by Thomson Reuters expected revenue of $42.1 billion, down 15 percent, and profits of $1.38 per share, down 25 percent from the same quarter a year ago.
“We understand China well and we remain very, very optimistic about the future there”. This revenue is compared to $50.5 billion in Q2 FY2016 and $49.6 billion in Q3 FY2015, drops of 16 percent and 15 percent respectively.
iPhone demand was stronger than what these numbers indicated, as the company reduced inventory by 4 million units during the quarter, according to Luca Maestri, Apple’s CFO.
Recently, an analyst claimed that the Cupertino-based company could generate a revenue of US$3 billion because of the Pokemon GO craze.
Sales in Greater China, once touted as Apple’s next growth engine, decreased 33.1%, compared with a 112.4% growth in the year-earlier quarter and a near 26% fall in the second quarter.
That aside, Apple’s services category performed remarkably well.
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“India is now one of our fastest growing markets”. Shares rose 7% to $103.47 in after-hours trade following publication of results.
