Sales Decline Forecasted For Apple

The Silicon Valley giant admitted that sales of its iPhones had missed expectations after it sold 74.8 million iPhones in the quarter, falling short of the 75.46 million target.

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. The iPad declined from 21.4 million sold units in Q1 2015 to 16.1 million units in the last quarter while Mac went down from 5.5 million units to 5.3 million units, respectively.

Looking forward to Apple’s March quarter, the company anticipates revenue to fall in the $50 billion to $53 billion range, an estimate which likely points to a decline in iPhone sales year over year.

Cook called Apple’s services business “an unbelievable asset” for the company, and noted that Apple now has 1 billion “active” devices in use that can drive services sales.

It forecast revenue for the next quarter of between £34bn and £37bn, below the £40.5bn it made in the same period a year ago. Apple also declared an upcoming dividend payment of $0.52 per share, payable on February 11 to shareholders of record as of February 8.

Apple’s results were hammered by a more expensive dollar – which makes their sales overseas less valuable – and economic turmoil, especially in large emerging markets like Brazil and Russian Federation.

Cook didn’t say whether iPhone sales will drop for the entire year, but he did say he doesn’t think the market is saturated thanks to emerging markets where many citizens have yet to invest in smartphones.

Apple is facing problems in its other products as well.

The news was preceded by weeks of dark predictions, with media reports claiming Apple had cut manufacturing orders from the companies that build the iPhone because inventory of the smartphone was backing up in retail channels.

Apple Chief Executive Tim Cook said he is bullish on prospects in China and the company will continue to increase investment in the market.

The “other products” segment, which includes the Apple Watch and Apple TV, had revenues of $4.4 billion.