iPHONE SALES ON THE DECLINE
Apple has reported a rise in quarterly profits, but its shares took a hit from weaker iPhone sales ahead of a 10-year-anniversary model on the horizon. However, Apple set a new quarter revenue record in India, growing by double digits
4.9%
Jump in profit year-on-year to over $11 billion in Q2
4.6%
Rise in revenues year-on-year to $52.9 billion in Q2
50.8M
Number of iPhones sold in Q2, down from 51.2m a year earlier
$256.8B
Record cash holdings Apple is saddled with
We’re seeing what we believe to be a pause in purchases of iPhone, which we believe is due to the earlier and much more frequent reports about future iPhones Tim Cook, Apple CEO
DUBAI — Looks like iPhone users are waiting for the highly-anticipated “X”.
Tech giant Apple posted a surprise drop in sales of its flagship device in its fiscal second quarter, in an apparent sign that customers are eagerly waiting for its 10th-anniversary iPhone this September, which is rumoured to have a curved or bezel-less display, 3D facial recognition and wireless charging.
The world’s most valuable company by market capitalisation reported that it sold 50.76 million iPhones in the three-month period ended April 1, marginally down one per cent from 51.19 million a year earlier, according to figures released on Wednesday.
Revenue, however, rose five per cent from last first quarter’s $50.56 billion to $52.9 billion, not far from forecasts of $53.02 billion, helped by an 18 per cent leap in its Services area — which include the App Store, Apple Music, iCloud and Apple Pay — from last year’s $5.99 billion to $7.04 billion.
Its Other Products category — which includes the Apple Watch, AirPods and Beats products — also provided a lift, up at $2.87 billion, 31 per cent better than the yearago’s $2.19 billion.
iPad sales, meanwhile, dropped 12 per cent year-on-year from $4.41 billion to $3.89 billion year-on-year, while Macs jumped 14 per cent from $5.11 billion to $5.84 billion.
“We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for the iPhone 7,” Apple CEO Tim Cook said in a statement.
He added that the iPhone Product(RED) had seen “great customer demand”, and highlighted that Apple’s Services business posted its highest revenue ever for a 13-week quarter.
China crisis?
Later at the conference call that began at 1am, Cook was in high spirits. “We feel great,” he told journalists, regarding Apple’s performance in the second quarter. A red flag, however, was once again China. Revenue was down 14 per cent from a year earlier — the only area in Apple’s five operating segments, which also include the Americas, Europe, Japan and rest of the AsiaPacific, which posted a year-onyear drop, with the last region again accounting for the biggest increase at 20 per cent. Cook said during the call that the China performance was affected by currency headwinds, but is still very bullish in the world’s second-largest economy, pointing out that store revenue leapt 27 per cent and Mac sales grew 20 per cent.
India, meanwhile, is “underpenetrated” according to Cook, though Apple has been investing heavily there as of late, opening a developer centre in the country. The rollout of 4G in the country of over a billion people should also help the company there.
“There are a tonne of things going on there,” he said. “We’re putting a lot of energy there.”
Cook also highlighted Apple’s “America First” policy under President Donald Trump, saying that the company supports over two million jobs in the US, while also spending billions on American suppliers. Chief financial officer Luca Maestri said that Apple added $10.8 billion in cash and equivalents — which brings its war chest to almost $257 billion (Dh944 billion), from the first quarter’s $246 billion. Shares of Apple, however, dropped 1.9 per cent in after-hours trading. Its market capitalisation stood at $773.9 billion on Tuesday.
Apple had 165 million paid subscriptions, though Maestri didn’t break this down further.
On wearables, Cook shot down the notion that the market was weakening. Apple Watch sales, he said, more than doubled in six out of its top 10 markets — but, again, Apple did not reveal any figures.
“We’re very committed [on wearables],” he said. “It’s already a big business; over time it will be bigger.” Practically no discussions were made on the upcoming iPhone or Apple’s autonomous car, which has made headlines recently.