Apple Watch reports record quarterly sales

The downturn comes in a year when the newest release from Apple was the iterative iPhone 6s and iPhone 6s Plus.

Apple Chief Executive Tim Cook said he is bullish on prospects in China and the company will continue to increase investment in the market.

Apple’s dominance in the mobile market is beginning to look fragile after the company’s fiscal first quarter earnings revealed underwhelming iPhone sales.

Apple’s big bets on China have paid off handsomely in the recent past with the region now accounting for almost a quarter of its revenue, more than the whole of Europe. In Q1 2015, Apple had revenue of $74.6 billion and net profit of $18 billion, or $3.06 per diluted share.

That’s not all we learned.

Cook didn’t mince words when talking about what Apple’s running into around the world. He noted that key markets including Brazil, Canada and Japan were hurt by the slowing economy, falling commodity prices and weakening currencies. One of the reasons for the decline in numbers is because of the foreign exchange headwinds caused by the strong US dollar. They made up almost 70 percent of its revenue in the past holiday quarter.

The iPhone maker said that it is anticipating revenue in between $50 billion and $53 billion for the current quarter, marking the first quarterly decline since 2003, and below consensus forecast of $55.5 billion. There’s certainly a deceleration; its growth a year ago was 99 percent. Sales of iPhones are expected to decline in the second quarter, according to management.

“We remain very bullish on China, and, you know, don’t subscribe to the doom and gloom kind of predictions frankly”, Cook said. Apple’s profits were 61 times higher than LG’s.

Services may be just a drop in the bucket of Apple’s sales.

Partly as a result, Apple generated almost $6 billion in revenue from services, including its App Store, iTunes, Apple Music subscriptions, Apple Pay.

“This is an unbelievable asset for us”, he said. Services accounted for $6 billion (nearly Rs 40,776 crore).

Apple shipped 74.8 million iPhones during the last three months of 2015. Apple’s aim would be to offer a smartphone that’s compact but also powerful – or, at least, more powerful than the 5S, which dates from 2013.

“This is not Steve Jobs’s Apple, which had hit after hit”, said independent technology industry analyst Rob Enderle.

But analysts say the tech giant’s biggest and best hope lies in the success of its next iPhone.

Cook’s reply: “No, I don’t think it’s a niche”.