Apple’s Q1 2016 earnings: iPad sales continue to tumble

Apple (NASDAQ:AAPL)’s CEO Tim Cook rolled out new services and gadgets, like Apple Watch, to diversify the business, though the company’s heavy reliance on the iPhone leaves it vulnerable to any weakness in demand. But it’s still a $20 billion drop, and one that might help refill that bucket if the iPhone’s era of growth truly is at an end.

“It’s disappointing to see them miss on an already downward adjusted sales number and the fact is that with their iPhone growth slowing what was needed was a product to be excited about”, said J.J. Kinahan, chief strategist at TD Ameritrade.

This may mark the first drop in sales of Apple since it started the iPhone. Meanwhile, its iPhone sales were mainly flat, with it selling 74.8 million units, a rise of 300,000 units year on year.

That figure falls within the $75.5bn to $77.5bn of revenue projected by Apple last October.

The company expects second-quarter revenue between $50 billion and $53 billion, while the average analyst estimate had been for $55.61 billion.

Revenue in the category jumped from $2.7bn (£1.89bn) in the first quarter of 2015 to $4.35bn (£3.04bn) in the first quarter of 2016. It reported an earnings per share (EPS) of $3.28, topping analysts’ forecasts of $3.23. Shares of Apple are down more than 11 percent over the past year. Profit topped out at $18.4bn, the highest reported by any company ever.

Apple has been diversifying with new offerings in music and is counting on growth from its Apple Watch and accessories.

“I think that there’s a misunderstanding, probably particularly in the Western world about China’s economy, which contributes to the confusion”. Global sales accounted for 66% of quarterly revenue, according to the Cupertino, California-based tech giant.

With faster 4G coverage expanding, Apple has already asked Indian government for a license to set up its own retail stores just as the market seems to be turning in its favour.

Maestri attributed the lacklustre revenue to foreign exchange headwinds caused by the strong United States dollar, which he said knocked about $5 billion off the company’s revenue.