Barclays profits down
Tech giant sees first drop in revenue in 13 years
Experts have said Apple needs to weave its magic and produce the next big thing if they want to combat falling sales.
Apple sold more than 51 million iPhones in the first three months of this year, 10 million fewer than during the same quarter a year ago.
As a result, Apple this week reported its first drop in quarterly revenue in 13 years - and the first-ever year-over-year decline in iPhone sales.
The slide is putting more pressure on Apple and CEO Tim Cook to come up with its next big product.
Cook, of course, has problems many corporate bosses would kill to have. Despite the decline in sales, Apple managed to rack up $10.5 billion in profit for the quarter.
“The future of Apple is very bright,” Cook told analysts on a conference call on Tuesday. However, Apple is battling perceptions that its latest iPhones aren’t that different from previous models, at a time when overall smartphone sales are slowing around the world. Apple also sells iPads, Mac computers and other gadgets, but nearly two-thirds of its $50.6 billion in quarterly revenue came from iPhones.
“They need to come out with that next great product,” said Angelo Zino, a financial analyst with S&P Global Market Intelligence. Zino said that while he is optimistic about the company’s future, “Apple absolutely needs to start diversifying their revenue base.”
Overall, the company’s revenue in the January-March quarter was down 13 per cent from a year earlier. And the company surprised analysts by forecasting another revenue drop of 13 per cent or more in the current quarter.
Apple hasn’t reported a year-over-year sales decline since 2003, when the iPhone didn’t even exist. Barclays plc has reported a 7 per cent fall in first-quarter profits, dragged down by businesses it intends to sell. The bank said net income dropped to £433 million ($631 million) from £465 million in the same period a year earlier. Barclays says profit from its main business rose 53 per cent to £950 million. In his first full quarter as chief executive, Jes Staley says the performance of Barclays’ core businesses “shows the potential power of the group once it is freed from the drag of non-core”. The bank revealed plans in March to split itself into two and simplify its operations. The restructuring plan comes as the UK forces lenders to separate riskier investment banking from retail operations. Such ring-fencing is meant to protect savings in any financial crash.
PRESSURE: Apple CEO Tim Cook