Apple iPhone sales expected to have slowed

It’s the slowest sales growth since the iPhone first came out in 2007. iPhone revenue was up a meager 1% YoY.

At first glance, things seem to have gone pretty well for the company, as it booked a record $18.4 billion of net profit, on record quarterly revenues of $75.9 billion.

“We expanded distribution of Apple Watch to nearly 12,000 locations in 48 countries during the quarter”, Apple CEO Tim Cook said during the company earnings call. While not a number many would scoff at, the figure is even lower than the 75.5 million figure analysts had pessimistically expected, despite marking the most iPhones sold in a single quarter.

Investors anxious that iPhone sales might actually fall for the first time in history, as Apple suppliers have been cutting production of iPhone components left and right, citing weaker demand.

Apple forecast second-quarter revenue of $50 billion to $53 billion, below analysts’ average forecast of $55.6 billion. But most analysts expect to see Apple report its first year-over-year decline in iPhone sales when its fiscal Q2 results are released in April.

In the period ended December 26, Apple reported a profit of $18.36 billion, or $3.28 a share, compared with $18.02 billion, or $3.06 a share, a year earlier. Apple said it recently passed the milestone of an installed base of 1 billion devices accessing its services, including iPhones, iPads, Macs, Apple TV, iPod touch and Apple Watch.

At one point, it appeared the iPad – launched in 2010 – would pick up the slack in product revenue, but first-quarter sales of the iPad have dipped. But they also acknowledged the company is working to broaden its business beyond the iPhone itself, which in recent years has provided the bulk of Apple’s revenue. That means that Apple has yet to announce a quarter where iPhone revenue fell compared with the previous year.

IPad sales have fallen for eight straight quarters. “Analysts have long feared that Apple’s sales in China, one of its top two markets, would falter amid a broad economic slowdown”.

There is growing pressure on the Apple to develop a groundbreaking product.