Ap­ple spins ser­vices as sales slump

The Myanmar Times - - International Business -

AP­PLE’S quar­terly profit slumped on a widely ex­pected drop in iPhone sales, but gains in ser­vices of­fered some op­ti­mism on the com­pany’s ef­forts to curb de­pen­dence on its smart­phone.

The com­pany said that profit fell 19 per­cent to US$9 bil­lion in the fis­cal quar­ter end­ing Septem­ber 24. Rev­enue fell 9pc to $46.9 bil­lion from $51.5 bil­lion a year ear­lier.

The re­sults were largely in line with mar­ket fore­casts and showed sales of the iPhone – Ap­ple’s big­gest rev­enue and profit driver – down 5pc from a year ago to 45.5 mil­lion units.

The quar­terly up­date only pro­vided lim­ited in­for­ma­tion on the re­cep­tion of the new­est iPhone mod­els, the iPhone 7 and 7 Plus, which were re­leased in early Septem­ber, and was likely to ben­e­fit from the woes of ri­val Sam­sung, suf­fer­ing from the re­call of its flag­ship Galaxy Note 7 phone.

An­a­lysts were ex­pect­ing de­clines in iPhone sales with many smart­phone mar­kets sat­u­rated, a sit­u­a­tion that has led Ap­ple to fo­cus on new prod­ucts like the Ap­ple Watch and ser­vices like mo­bile pay­ments, Ap­ple TV and stream­ing music.

Chief ex­ec­u­tive Tim Cook wel­comed what he called “our strong Septem­ber quar­ter re­sults”, say­ing they “cap a very suc­cess­ful fis­cal 2016 for Ap­ple”.

“We’re thrilled with the cus­tomer re­sponse to iPhone 7, iPhone 7 Plus and Ap­ple Watch Se­ries 2, as well as the in­cred­i­ble mo­men­tum of our Ser­vices busi­ness, where rev­enue grew 24pc to set another all-time record,” he said in a state­ment.

The world’s largest com­pany by mar­ket value closed out its fis­cal year end­ing Septem­ber 24 with a net profit of $45.7 bil­lion on rev­enues of $215.6 bil­lion, both fig­ures lower than the prior year.

“Pre­vi­ously, Ap­ple was able to rely on strong sales of phones, tablets and com­put­ers to drive up rev­enue and profit across all ge­ogra­phies. This is no longer the case,” said Neil Saun­ders of the re­search firm Con­lu­mino.

Still, Mr Saun­ders noted that “Ap­ple is being judged by its own in­cred­i­bly high stan­dards,” and that “even with the dips in growth it re­mains a phe­nom­e­nally suc­cess­ful busi­ness that is far from run­ning out of steam”.

Ap­ple’s re­sults showed a 6pc drop in iPad unit sales and a 14pc de­cline in the num­ber of Mac com­put­ers sold.

While iPhone sales ac­counted for more than half of rev­enues, ser­vices rev­enue grew to $6.3 bil­lion on ser­vices such as Ap­ple Pay and its en­ter­prise of­fer­ings.

In the key “Greater China” mar­ket, Ap­ple said rev­enues were down 30pc from a year to $8.8 bil­lion. But the com­pany noted a 10pc rise in rev­enue from Ja­pan and cited gains in other global mar­kets.

On a call with an­a­lysts, Mr Cook de­clined to com­ment on what Ap­ple has in the pipe­line but did in­di­cate the com­pany was in­vest­ing in “prod­ucts in the de­vel­op­ment phase which have not yet reached the mar­ket”.

Asked to ex­plain the sharp rise in re­search and de­vel­op­ment spend­ing, Mr Cook said, “We’re con­fi­dently in­vest­ing in the fu­ture.” –

Photo: EPA

Cus­tomers stand in front of an Ap­ple store at the start of iPhone 7 sales in Ham­burg, Ger­many.

Newspapers in English

Newspapers from Myanmar

© PressReader. All rights reserved.