Apple posts record profit but iPhone growth is slowing

Apple has revealed that the active user base has grown to one billion.

But iPhone sales grew by just 0.4%, the slowest rate in the history of the Apple smartphone, and a huge drop compared with the 46% growth in the same quarter past year.

The California-based technology giant posted a profit for the quarter ending December 26 of £12.8bn, having sold 74.8 million iPhones in the three-month period.

The company is still keeping sales of the Apple Watch under wraps – the only clue in these results was the $4.4bn in sales of “other devices”, up almost two-thirds on a year ago. The 78 million mark is up by one percent, compared to previous year during the same time.

Apple’s earnings come amid investor worries about a decline in iPhone sales, which could point to a maturation of its primary business.

Apple CEO Tim Cook struck a more optimistic note, saying the company was “increasingly putting more energy” into India, citing a largely youthful population with rising disposable income as more people join the workforce.

Wall Street has been expecting Apple to report sales in the second quarter of $55.64 billion. Apple disclosed its earnings after the market’s close; in after-market trading the company’s shares were down $2.83, or 2.8 percent. Apple also issued a sales forecast that signaled that the sluggishness would continue, with the company projecting its first revenue decline in more than a decade.

Some observers believed market saturation in developed markets and slowing demand in China, which had boosted recent figures considerably, would see the first ever fall in iPhone sales during the first quarter.

In terms of Macs, sales were down but relatively steady, with 5.3m units sold during the last three months of 2015, down slightly from the 5.5m a year ago. Investors were also buoyed by strong iPhone sales in China despite emerging softness, especially in Hong Kong. Apple’s stock has fallen further than the tech-heavy Nasdaq, which is down 4% in the same period, and the S&P 500, which has fallen 7%.

The company’s first-quarter net profit rose to $18.36 billion from $18.02 billion, while revenue increased 1.7 percent to $75.87 billion, both records for the company.

That’s not a billion iPhones, though: iPads, Macs, iPods, Apple TVs and Apple Watches all counted toward the total.