After setting iPhone record, Apple forecasts rare sales drop

And sell devices, it did: its iPhone line shifted 74.8 million units during the period; that was barely a change from past year, however, when the company shipped 74.5 million units.

All analyst eyes were also on Apple’s guidance for the next quarter, and the company confirmed rumours that it would suggest a drop in revenue – offering guidance that revenue for the second quarter of 2016 would be between $US50 and $US53 billion, down from $US58 billion in the same quarter previous year. Mr. Cook echoed the notion that Apple’s service business is a serious part of the company’s fiscal success saying, “The growth of our Services business accelerated during the quarter to produce record results”. But its forecast implies Apple doesn’t expect to match the 61 million iPhones sold in last year’s January-March quarter. The Company posted record quarterly revenue of $75.9 billion and record quarterly net income of $18.4 billion, or $3.28 per diluted share. Cook said about 60% of iPhone customers haven’t yet upgraded to the iPhone 6 or 6S (or the 6 Plus or 6S Plus).

Others say it’s premature to count Apple among former tech giants, like Hewlett-Packard, that have struggled for relevance as their pace of growth and innovation declined.

That would be Apple’s first year-over-year sales decline since the January-March quarter of 2003 – long before the company began selling iPhones and iPads.

However, it said sales in the current quarter are likely to fall year-on-year, predicting that iPhone sales will decline for the first time since the world’s most profitable product was released nine years ago.

The iPad, however, continued its slide: sales were down 25 percent year-on-year. Revenue from the region had almost doubled in the fourth quarter. Back then, Apple was a fraction of its current size, reporting quarterly revenue of just $1.45 billion. Analysts now estimate revenues of $55.64 billion for the quarter.

New leaks and notes from an industry analyst continue to fuel rumors that Apple plans to launch a four-inch version of the iPhone later this year. Cupertino, California-based Apple has entered the wearables market, improved its Mac lineups and launched a new music-streaming service.

Maestri attributed the lackluster revenue to foreign exchange headwinds caused by the strong USA dollar, which he said knocked about $5 billion off the company’s revenue. In a report this week, analyst Colin Gillis of BGC Financial warned that “the big issue for Apple” is whether the company can garner significant amounts of revenue from those new products.