It’s finally happened
The inevitable has finally happened – iPhone sales have finally hit a wall, and Apple has suffered financially as a result. Revenues for this quarter is a mere $50.6 billion compared to $58 billion last year, and less than the $52 billion that analysts were expecting. iPhone sales are mostly responsible for the revenue decline, as the company sold only 51.2 million iPhones this fiscal Q2 2016, compared to the 61 million it sold during the same period last year.
Tim Cook tried to explain the sale slump, stating that while iPhone 6S upgrades were higher than when the iPhone 5S launched, it hasn’t been able to match the accelerated upgrade cycle they saw when they launched the iPhone 6 in 2014. Since the introduction of bigger iPhones, fewer people saw the need to upgrade to a newer model, which is probably the reason why iPhone sales are stagnating the way they are.
The other product lines of Apple also aren’t doing so well: the company only managed to sell 10.3 iPads this quarter compared to the 12.6 million it sold last year. Mac sales were also down – 4.03 million sold compared to the 4.6 million last year.
If there’s a bright spot in Apple’s earnings this quarter, it’s their services business – this category managed to earn $6 billion in revenue, up from $5 billion last year. The services business include things like the App Store, iTunes, Apple Pay, iCloud, etc.