Apple sets record for quarterly profit but expects sales decline

Apple has forecast its first sales decline since 2003, with the company arguing that the decline is the result of stalling iPhone sales in an increasingly saturated smartphone market.

“Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV”, Apple chief executive Tim Cook said in an earning release.

In conjunction with Apple’s earnings report, the company on Tuesday also announced that the cumulative number of active Apple devices (a tally which includes the Apple Watch, iPhones, iPads, Macs, iPods, and the Apple TV) eclipsed 1 billion last quarter, an impressive milestone to say the least.

The company reported revenue of $18.37 billion from Greater China, accounting for 24.2 percent of total revenue.

Apple is unlikely too bothered, though, as it raked in $18bn in profit during the three-month period, the largest the profit largest ever recorded by a single public corporation.

News isn’t as good for the upcoming quarter.

In its quarterly earnings report, Apple said it sold 74.8 million iPhones in the last three months, just 1 percent more than it did in 2014 when it sold 74.5 million phones.

Apple’s iPhone shipments fell short of analyst expectations for 75.5 million, according to research firm FactSet StreetAccount.

The group shifted 74.78m iPhones in the first quarter, up just 0.4 per cent compared to the same quarter of previous year, and missing analysts’ projections of 75m.

Apple is the most valuable company in the world with a market cap of $552 billion, but weak iPhone sales and a slowing economy in China, an important market for the tech giant, could put the company in danger of losing that distinction to Alphabet, the parent company of Google.

But analysts warn the economic slowdown in Asia will cut into Apple’s growth going forward.

“Two-thirds of Apple’s revenue is generated outside the United States, so foreign currency fluctuations impact us very much”, continued Cook. Analysts said the company will have to wait until the launch of the iPhone 7, expected later this year, to return to growth, as buyers upgrade to the latest version. Net profit hit $18.36n, up from $18.02b while revenue grew by 1.7% to $75.87b. That reliance explains why investors are so attuned to any minute changes in the iPhone’s fortunes.