Services also promise a recurring revenue stream, unlike hardware sales.
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Its shares fell about 8 per cent, dropping below $100 for the first time since February.
The other flagship products in Apple’s line-up – the iPad and Mac computers – both also recorded a decline in their sales for the first three months of the year. The phones featured larger screen sizes and sparked historic sales.
“Apple is still driving iPhone market share in almost every region, and we will shortly know if the iPhone SE enables continued market share gains in the mid-range”.
With the plunge in iPhone sales in the reporting quarter apparently hinting that the iPhone has reached saturation, Neil Saunders – CEO of research firm Conlumino – said that Apple can “reinvigorate sales growth” only if it comes up with “a radical new innovation or product rather than just the current incremental improvements to existing products”.
MMS Ventures optimistic of 20% sales growth in H1: MMS Ventures Bhd, which is involved in the design and manufacture of LED and semiconductor industrial automation systems and machinery, is optimistic of a 20% sales growth in the first half this year, driven by the automotive sector. Chinese regulators have demanded that Apple halt its sales of books and movies in the country, the New York Times reported last week.
“They need to come out with that next great product”, said Angelo Zino, a financial analyst with S&P Global Market Intelligence. The company also reported earnings per diluted share of $1.90, which is down from $2.33 per share one 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 $5 billion in revenue.
Apple also said it was raising its capital return programme by US$50 billion through a US$35 billion increase in its share buyback authorization and a 10% rise in the quarterly dividend. Although sales of the phone were not captured in the second quarter, the device is off to a strong start, particularly in emerging markets, Maestri said.
Willowglen eyes TNB contracts: Willowglen MSC Bhd is eyeing Tenaga Nasional Bhd (TNB) contracts and its managing director Wong Ah Chiew says the company can be a substation control automation supplier to the utility.
Pushing ahead in services in China – Apple’s second largest market – may also be challenging due to regulatory concerns. “They’ve used a lot of marketing campaigns and advertising online”.
Goldman Sachs removed Apple from its conviction list after Apple’s results and said it expected the company’s shares to remain weak until the market gets more comfortable with the prospects for iPhone 7. “The future of Apple is very bright”, he said.
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With many PC makers working on single-digit margins and some analysts suggesting many smartphones are being sold at a loss, Apple’s performance is quite remarkable.
