Apple Grows Services, Wearable Revenues As iPhone Decline Fails To Materialise

Technology giant Apple announced Tuesday that its first quarter revenue increased to record levels, despite slowing sales of its flagship iPhone devices.

Tepid demand for the latest iPhones – that succeeded blockbuster sales of the iPhone 6 and 6 Plus – led Apple to sell 74.8 million iPhones in the first quarter.

Leading up to Apple’s earnings announcement, analysts were anticipating Apple’s quarterly revenue to check in at $76.6 billion, with quarterly profits and EPS checking in at $18.2 billion and $3.23, respectively.

Past year in Q1 Apple managed a record-breaking quarterly profit of $18 on $74.60 revenue, and beating that figure keeps the company fixed to the tech throne.

Cook called Apple’s services business “an unbelievable asset” for the company, and noted that Apple now has 1 billion “active” devices in use that can drive services sales. He said he believes investors will pin their hopes to the likely release of a new iPhone in September, a pattern Apple has followed over the past few years.

No one expects Apple to match those results in the current, January-March quarter, as sales traditionally drop after the holiday shopping season and the introduction of new models. “Major markets, including Brazil, Russia, Japan, Canada, south east Asia, Australia, Turkey and the eurozone have been impacted by slowing economic growth, falling commodity prices and weakening currencies”.

Apple sold 16.1 million iPads, short of analysts’ expectations of 17.3 million and well short of the 21.4 million the company sold in the same period past year.

The smartphone accounts for 68% of Apple’s revenue and iPhone revenue has never declined year-over-year.

“So much of Apple’s profit comes from the iPhone”.

It was also a huge drop when compared to the 46 per cent growth in sales reported for the same quarter, last year. The company enjoyed high double-digit revenue gains due to the impressive sales of the iPhone and its other devices.

The iPhone isn’t the only Apple product to hit hard times. Year over year, Mac sales were down 4% while iPad sales were down 25%.