Apple Posts Another Record Quarter, but iPhone Sales Flatten

Apple predicted revenue would fall to between $50bn and $53bn during Q2, below the $58bn in the same quarter in 2015. Financial analysts surveyed by Thomson Reuters had estimated that Apple would report earnings of $3.23 per share for the quarter on revenue of $76.6 billion, according to a January 26 report by The Wall Street Journal.

“We do think that iPhone units will decline in the quarter”, warned Apple CEO Tim Cook, during his company’s quarterly results call.

Along with record profits during the fourth quarter, Apple said its active installed base surpassed a billion devices for the first time ever.

The iPhone 6s and 6s Plus models, didn’t sell in markets such as the US and China as well as the company had hoped.

Apple said it forecasts revenue for that period to be between $50 billion and $53 billion, which is down from $58 billion the same period a year ago.

The results and guidance reflect how Apple, under its chief executive, Timothy D. Cook, is grappling with becoming a maturing tech company and is now entering a period of slow growth.

“It’s disappointing to see them miss on an already downward adjusted sales number and the fact is that with their iPhone growth slowing what was needed was a product to be excited about”.

It’s believed the turbulent economic environment in China is behind Apple’s issues, with just a 14% growth rate in the country compared with 70% a year ago. The company sold 74.78 million iPhones in Q1 2016, by far the largest contributor to its $18.4 billion in profit on sales of $75.9 billion.

Apple’s shares, which have fallen 5 percent this year, were up 0.4 percent at $100.42 in volatile after-hours trading.

Kagan said he expects the newest version of the iPhone to spur growth, provided it has the right eye-catching new features.

Apple’s only new product launched during the quarter was the iPad Pro, but iPad shipments actually fell 25 per cent to 16.1m, totalling $7m in sales.

“The fact remains that 2016 is year when Apple needs to come up with revolutionary rather than evolutionary product”.