San Francisco – Apple Inc (NASDAQ: APPL), the tech giant whose weakness has recently increased in its second-largest market, China, announced on Tuesday that sales of its flagship product – the iPhone -have dropped significantly. Compared with last year’s second fiscal quarter, the company sold 16 percent fewer iPhones in the same quarter this year.

The Silicon Valley firm, which has been considered as the world’s most valuable company across the last five years, said that revenue dropped 13 percent to $50.6 billion.

Apple reported it sold 16 percent fewer iPhones in the second fiscal quarter of this year. Credit: IBTimes

Tim Cook, Apple’s chief executive, said the decline was a “pause” rather than a dramatic change in the business of the company, which has quickly grown into a giant but is having a hard time as it tries to keep up the momentum.

He affirmed in a call with Wall Street analysts that the current crisis would pass and reassured him that Apple’s future was “very bright,” as reported by The New York Times.

Mr. Cook pointed out that the current decline was a normal part of the two-year product cycle of the iPhone. Released in 2014, the iPhone 6 line triggered a surge in sales last year as customers sent the company’s stock to a record high. Apple’s chief executive said the current base of iPhones has risen 80 percent, compared with the rate of two years ago.

However, investors were not so sure since net income declined to $1.90 a share, falling short of Wall Street expectations.

Apple’s shares dropped 8 percent in after-hours trading, which wiped out roughly $47 billion in stock market value. The tech giant projected revenue of $41 billion to $43 billion for the current quarter, which is much worse than Wall Street had predicted.

Apple’s struggles in China

Projections are even more negative in China. The company’s second-largest market, after the United States, includes Hong Kong and Taiwan.

According to the Times, sales in China were down 26 percent compared to the previous year. In mainland China, sales dropped 11 percent partly due to the country’s slowing economy. Projections there have become uncertain since the government shut down e-Book and iTunes services a few days ago without any explanation.

Amit Daryanani, an analyst at RBC Capital Markets, told the Times that a common issue across tech firms is that the strong dollar has made American products more expensive overseas. Apple is facing an increasingly competitive market in which its rivals using Google’s Android operative system continue to challenge the Silicon Valley company with cheaper devices.

Source: New York Times