And while Apple Chief Executive Tim Cook had earlier said the company expected iPhone sales and overall revenue to fall from past year, the size of the declines were enough to add to growing concerns about Apple’s ability to reignite enthusiasm for its iconic consumer electronics products.
Revenue for the March quarter dropped to $65 billion and quarterly net profit fell to $13.5 billion.
Analysts do expect that iPhone sales will recover after the company introduces this year’s expected model of the iPhone.
Sales of the iPad dropped 18 percent to 10.3 million units, the ninth time in a row that sales of Apple’s tablet have dropped from the previous year. The stock compare is compounded by the continued week macro environment this year and the strong USA dollar which affects our revenue growth in global markets.
Sales fell faster in China than in any other region but pushing ahead in services in China – Apple’s second largest market – may also be challenging due to regulatory concerns. Tim Cook said the services revenue during the March quarter was the highest ever. Interestingly, this segment is now considerably bigger than both Mac and iPad. That would buy a lot of Apple Watches. That area posted revenue of $6 billion – a 30 percent increase.
While Apple is the world’s largest company by profit and market value, it has been shifting its focus in anticipation of the slowdown.
“While Apple executives had predicted iPhone sales would decline this quarter, they must reassure investors that the drop represents a momentary roadblock for the company, rather than a permanent shift for the product that fueled its meteoric rise”.
During the same period a year ago, the company earned $58 billion in revenue and had a net income of $13.6 billion. The company offered weak guidance for the third quarter in the $41-to-$43 billion range.
Wall Street was modeling for Apple to earn $1.76 a share, down 5%, on sales of $47.32 billion, also down 5%, in the June quarter.
IPhone sales in the period fell to 51.2 million from 61.2 million a year earlier. Operating income fell from $18.3 billion to nearly $14 billion.
The business is still producing healthy cash flows, and management increased the size of the capital distribution program.
Separately, the board said it was increasing its quarterly dividend 10%.
The company also said it will boost its share-repurchase program to $175 billion, from the $140 billion announced a year ago.
Apple ended the quarter with a massive cash hoard of almost $232 billion in cash and liquid investments. Most of that money is held overseas, though, and repatriating it would mean a huge tax burden for the company.
Apple has maintained that it sees India as a bright spot and wants to open its own stores in the country, a proposal which is subjected to approval.
Apple will now go into damage control mode, assuring investors that this dip is just a temporary set back and not an indication of a trend that will snowball into Apple losing its dominant grip on the high-end smartphone market (as per Reuters). How does this “miss” impact on the outlook for the United States stockmarket going forward?
Johnny Manziel to plead not guilty to Colleen Crowley assault charge
As a result, Manziel has agreed never to contact his ex and to stay at least 500 feet from her residence until 3 February, 2018. The indictment for a class-A misdemeanour charged Manziel with hitting Crowley and forcing her into a vehicle .
