Apple stated on Tuesday afternoon that its sales and profit both fell last quarter. This is quite unexpected, especially for a company that has been growing quickly and it has become one of the largest technology companies ever. This is due the weakness in key global markets like China and the lack of another hot product to make customers open the wallets.
On their fiscal Q2 2016 results, the company announced that they sold about 51.2 million iPhones, which is a 16 percent less than last year sale where about 61 iPhones were sold back in 2015. Now talking about money, their revenues dropped from $58 billion to this year’s $50.6 billion, a drop of about 13 percent compared to Q2 2015.
Apple CEO Tim Cook gave some context for the iPhone sale failure. While iPhone 6S upgrades were outpacing those when the iPhone 5S launched, it hasn’t been able to match the “accelerated” upgrade cycle the company saw when it launched the iPhone 6 in 2014. Therefore, many iPhone buyers switched to other smartphones like Android, along well as first-time buyers.
But Cook stays optimistic since he said that the business still healthy. On the last six months, there have been more switchers from other smartphones than on other six-month periods. Also emerging markets showed up, for example, India, where iPhone sales grew up about 56 percent.
Not only iPhone sales went down, this also involves the iPad, where they sold only about 10.3 million iPads this quarter while on last year they sold 12.6 million. This means that the iPad sales dropped about 19 percent.
Mac sales were also down; on this Q2, they sold about 4.03 million computers. Last year Apple sold 4.6 Macs last years, meaning that sales declined 12 percent.
This means that this led to an overall drop in profits, which came in at $10.5 billion in the quarter, which is a 23 percent drop compared to a year ago.
On the bright side of the Apple
Apple’s services business might be even better this year, where it made an income of $6 billion, up from the $5 billion they made last year. The services include things like the App Store, iTunes Store, Apple Pay, iCloud and so. Tim Cook also noted on the investor call that the App Store revenues increased about 35 percent year-over-year and Apple Music subscribers now exceed 13 million. Not everything was bad news after all
Source: The Wall Street Journal