Apple set for slowest ever iPhone sales growth

“We expanded distribution of Apple Watch to nearly 12,000 locations in 48 countries during the quarter”, Apple CEO Tim Cook said during the company earnings call.

Apple is bracing for its first sales decline in 13 years, despite selling a record 74.8 million iPhones in the final three months of 2015, in what may prove to be a turning point for the world’s most valuable company.

Apple reported revenue of $75.9 billion, slightly lower than what analysts had forecast of $76.67 billion, but still a record quarter for the company.

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 50 and 53 billion USA dollars, down from 58 billion in the same quarter past year.

Apple is now facing significant foreign exchange headwinds.

Apple’s revenue relies on the sales of iPhones substantially: Fully 66 percent of sales were from iPhones in fiscal year 2015, according to the company’s 10-K filing.

Apple’s shares, which have fallen 5 percent this year, were up 0.4 percent at $100.42 in volatile after-hours trading.

Shareholders took a deep breath after Apple released its quarterly financial report Tuesday, as the worst of their fears were not realized. The holiday quarter is always Apple’s (and most retail companies’) biggest money making period of the year.

According to FBR Capital Markets analyst Daniel Ives, “Apple has emerged as a victim of its own success as the globally influential iPhone 6 smartphones were hard to emulate and as many buyers are either purchasing an older, and more affordable iPhone 6 or waiting for the next new one, the iPhone 7”.

Apple expert and assistant professor of information systems at Warwick University, Aleksi Aaltonen, said his biggest concern is that the company may cut its research and development spending to temporarily boost profits and appease investors.

Growth in these areas is a positive for Apple, but the revenue generated pale in comparison to iPhone.

The last thing we heard about the new Apple Watch 2 was that the device would not launch until the fall of 2016.

Apple’s $18.4bn net income was up two per cent from $18bn in the year-ago quarter.