Apple has reported a second consecutive quarter of falling iPhone sales, but the 15% drop was not as bad as analysts had feared.
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The drop in iPhone sales contributed to a fall in revenue for a second-straight quarter after a 13-year run of growth for the world’s largest information technology company by revenue and by total assets.
This is largely as a result of fewer people purchasing new iPhones, with the launch of the iPhone SE still failing to reverse Apple’s fortunes in any meaningful capacity, as the company shifted 40.4 million devices this quarter compared to the 51.2 million it sold this time past year. Apple had predicted revenue of between $41 billion and $43 billion for the three-month period, with margins of up to 38%.
Earnings per share were $1.42, above the analysts expected earnings of $1.38 per share and revenues of $42.1 million. That topped analysts’ average prediction for revenue of $42.1 billion.
Despite the disappointing performance in China, Cook said that he’s “encouraged about the growth prospects” in the country and that the “underlying business there is stronger than the results imply”.
Cook also today discussed Apple’s strategy on buying up smaller companies that can bring something to Apple’s feature set. China is a significant factor because it accounts for nearly a quarter of Apple’s sales.
iPad sales were also down, dropping to 9.95 million from 10.9 million.
Apple’s services business, which includes the App Store, Apple Pay, iCloud and other services, generated almost $6 billion in revenue, up 18.9% from the previous year. However, the figures are still down from the 4.7 million recorded a year ago. The company’s overall revenue fell by a similar percentage, to $42.4 billion. That showed a slight rise in revenue to $2.2 billion.
It’s a bump on the same time last year (up 19 per cent), but it’s remained largely flat in recent quarters since an increase at the start of the year. “We have been and continue to invest in AR in the long run”, he said.
Meanwhile, Apple’s chief financial officer Luca Maestri said the results had exceeded their expectations in a quarter marked by currency fluctuations and comparisons between iPhone’s latest model, the 6S, and the best-selling iPhone 6.
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“We had a very successful global launch of iPhone SE, and demand outstripped supply throughout the quarter”, Cook said.
