Apple breaks iPhone sales record but growth grinds to a halt

Sales of the iPhone has been the most significant evaluator of the company, and if the smartphone’s sales in China is expected to slow down, Apple might need a new product such as the rumored electric vehicle to keep investors happy.

This was the first holiday quarter for Apple’s newest products, the Apple Watch and iPad Pro.

Apple posted record quarterly revenues of $75.9bn and record quarterly profits of $18.4bn, but warned the revenues would fall this quarter.

In its first quarter of this year, Apple sold 74.8 million iPhones – a new record – compared with 74.47 million over the same period last year.

Apple’s Internet Services branch, including iTunes, iCloud and the App Stores, logged $6.05bn of revenues on the quarter, up 26 per cent from year-ago quarter when services brought in $4.79bn.

Apple’s stock has been in a slump for months, as investors worry that the company won’t be able to duplicate last year’s growth in sales, which were in the double-digit percentages.

For the first time ever on Tuesday, Apple pulled back the curtain on its services revenue, revealing that it sold $19.9 billion worth of services to customers in 2015, up 10% from a year earlier. As of China, Apple products are considered a status symbol.

In pure monetary terms, the iPhone had its best quarter ever in Q1 2016: it raked in $51.635 billion in revenue.

But suggesting there is still room for growth, 60 percent of people who had an iPhone prior to the launch of the iPhone 6 have yet to upgrade to an iPhone 6 or 6S, Cook said.

However, CEO Tim Cook and the company remain confident in the long-term potential of markets such as China and India. “There needs to be a great deal more to excite consumers”. You simply can’t ignore personal computing platforms as big as Apple’s and Google’s. With China’s economy gradually slowing down, India is still a relatively untapped market for the company, and it’s something that Tim Cook mentioned personally in his earnings call.

Speculation that the second quarter of Apple’s financial year will see a decrease in iPhone shipments will now intensify.

While the iPhone has quickly grown in popularity and contributes more than 50% of Apple’s revenue since around 2012, it was 2014 and 2015 when its contribution to the total Apple revenue surged to almost 70%.

This indicated that despite a saturated smartphone market, consumers were keen to buy the newer and more expensive iPhone versions – good news for the iPhone 7 cycle, Pacific Crest Securities analysts said.