Apple’s dominance begins to waver as quarterly reports shows underwhelming iPhone sales

The news was preceded by weeks of dark predictions, with media reports claiming Apple had cut manufacturing orders from the companies that build the iPhone because inventory of the smartphone was backing up in retail channels.

Speaking on the company’s earnings call, Apple CEO Tim Cook said that the number of apps developed for Apple TV was growing rapidly and that today there are “over 3,600 apps delivering everything from games to entertainment to educational programming”. The quarterly sales shows 0.4 percent growth from the 74.5 million units that the Cupertino giant had sold in the same quarter a year ago.

Apple recorded its biggest ever quarter during its fiscal 2016 first quarter, but warns that sales will slump in the year ahead.

The second edition of the Apple Watch is expected to be revealed in September.

FBR Capital Markets analyst Daniel Ives said: “Apple has become a victim of their own success as the blockbuster iPhone 6 product cycle was hard to replicate as many customers are either buying an older, cheaper iPhone 6 or waiting for the iPhone 7”. Apple also issued a sales forecast that signaled that the sluggishness would continue, with the company projecting its first revenue decline in more than a decade. The company sold 74.78 million iPhones in Q1 2016, by far the largest contributor to its $18.4 billion in profit on sales of $75.9 billion.

“We generated operating cash flow of $27.5bn (US) during the quarter, and returned over $9bn (US) to investors through share repurchases and dividends”. “To be fair, growth engines inevitably hit a saturation point, but this is something that Apple has been able to maintain since it launched the iPhone in 2007”.

We contacted independent tech analyst Jeff Kagan to ask his opinion on Apple’s news. The projection came after a holiday quarter in which net sales and iPhone shipments missed estimates, reinforcing concerns that a push in China won’t offset a decline in the rest of the world.

For its next quarter, Apple is forecasting revenue of between $50 billion and $53 billion, with gross margin between 39 per cent and 39.5 per cent.