Apple shares slide off iPhone sales, Cook warning

For the first time in 13 years, Apple Inc (AAPL.O) is staring at a revenue slide.

Apple’s latest financial results revealed the lowest iPhone growth since the device debuted, but the Cupertino firm does have one thing to celebrate.

Apple reported growth in sales of the company’s flagship smartphone was the slowest year-over-year ever, ending a growth streak that began in 2007, when the original Apple iPhone was first introduced.

Apple faces “a few tough quarters ahead until we get to the build-up around iPhone 7 later this year”, said Daniel Ives of FBR Capital Markets, in a research note Wednesday. He explained that less than half of all iPhone owners now use a new, larger screen model. For the quarter, Apple posted revenue of $75.9 billion and net quarterly profit of $18.4 billion, or $3.28 per diluted share, compared to revenue of $74.6 billion and net quarterly profit of $18 billion, or $3.06 per diluted share, in the year-ago quarter.

Though Apple did not break down sales figures for Apple TV, chief financial officer Luca Maestri said that the growing contribution from Apple Watch, as well as the successful launch of the new Apple TV, caused sales in Apple’s “other products” category to grow 62% year-on-year to US$4.35 billion.

With the growth slowing in iPhone sales, analysts expect sales of units of the smartphone to enter negative territory for just the first time later in 2016 due in part because of rumors from the supply chain of Apple of reduced orders for the iPhone 6S.

Apple also predicts it will generate between $50bn and $53bn during the period. Analysts had expected revenues of $76.5 billion.

But it’s not all good news for the California tech giant.

So, now that the dust is settling following the initial reaction to Apple’s quarterly results and outlook, the question of “what’s next?” is facing Cook and Co., Apple customers and those investors, who have seen Apple’s stock price fall by nearly 29 percent since the shares reached a 52-week-high of $134.54 last April. Year over year, Mac sales were down 4% while iPad sales were down 25%.