Apple’s new $20 billion business

Apple is expected to release the next iPhone models, with new features, later this year.

“The growth of our services business accelerated during the quarter to produce record results”.

While iPad sales saw an increase from the previous quarter Apple tablet sales were down from the same holiday quarter a year ago.

Apple reported its first quarter 2016 financial results today, with 74.8 million iPhones and 16 million iPads sold.

But due to a “weakening” macroeconomic environment it anticipated its sales to be down between five per cent and 10 per cent year on year for its March quarter at between $50bn (£34.9bn) and $53bn.

Despite the bleak outlook for the year ahead, Apple racked up a record-breaking profit of £12.8 billion for the last three months of 2015.

In an earnings call in which the company reported meagre iPhone growth and forecast its first revenue drop in 13 years, the Indian market stood out as a rare bright spot for Apple. Earnings amounted to $3.28 a share, which beat the $3.23 average forecast among analysts surveyed by FactSet.

Growth in India is a tantalizing prospect as Apple grapples with the economic downturn in China, its second largest market.

Apple Inc. (NASDAQ:AAPL) did some calculations to conclude that $100 of non-U.S. dollar revenue in the Q4 2014 is just worth $85 today.

“Apple has been in this position before, although pressure is building for Cook to show success outside its core iPhone DNA to give investors confidence”, says FBR Capital Markets analyst Daniel Ives.

While the corporation has failed to bring significant changes to its star product, company on the other hand has a different view. The tech giant said it expects to sell 50-52 million iPhones in the March quarter.

“We remain extremely bullish on China, and we’re continuing to invest”.

The company’s stock is trading around $94.86 per share, down by more than 5% at the time of this writing around 2:18 in the afternoon in NY. Revenue from services segment swelled 26%, while the revenue from other products, which includes the new smart watch grew 62%. The iPhone may still dominate Apple’s overall business – it accounted for 68 percent of revenue in Apple’s first quarter – and with the so-called iPhone 7 likely to launch later this year, it will continue to be the point on which Apple pivots.