Apple margins fall in fourth quarter results
Revenue down – but Apple still makes money by the boatload
Falling profits are no longer the stuff of nightmares around the Apple Campus – they're becoming all to real for Apple's head honchos.
Apple's recent fourth quarter results show that gross margin fell from 39.9% a year ago to 38% in the fourth quarter of 2016. Quarterly revenue was down from $51.5 billion to $46.9 billion, and net income also dropped from $11.1 billion to $9 billion.
Of course, that is still a huge amount of money for any company, and it's unlikely that Tim Cook will be feeling the heat too much. But for a company that was once known for its unflagging march towards higher and higher profits, it's a sign of the changing times in the ultra-competitive tech world.
There were some healthy signs, though. The services side of grew 24%, driven by operations such as the App Store and iCloud.
Furthermore, Apple posted some bullish guidance for the first quarter of 2017: expected revenue between $76 billion and $78 billion, and gross margin between 38% and 38.5%. The increased revenue is likely to be due to the sales bump from the iPhone 7, as well as the newly updated MacBook Pros.
The fourth quarter results still make Apple one of the wealthiest companies on the planet.