Apple iPhone sales and revenue finally decline

The inevitable has finally happened. After years of continually growing iPhone sales (and corresponding revenue growth), Apple has hit a bump. The company just announced its fiscal Q2 2016 results, and the company sold 51.2 million iPhones, a 16 percent decline from the 61 million it sold one year ago. It’s the first time iPhone sales have ever declined year-over-year. Similarly, revenues of $50.6 billion were down 13 percent from the $58 billion it made in Q2 2015. The company warned on its last earnings call that this was likely to happen, but it’s still quite notable. Apple has describing its quarterly revenue as “record-breaking” for so long that it’s hard to remember the last time it had a down quarter. (The Wall Street Journal says it’s been an incredible 13 years.)

As for Apple’s other main product lineups, iPad sales continued to slump: the company sold 10.3 million iPads in the quarter, down 19 percent from the 12.6 million it sold a year ago. Mac sales were also down, with 4.03 computers sold — that’s a 12 percent decline from the 4.6 million Macs sold in Q2 of 2015. This led to an overall drop in profits, which came in at $10.5 billion on the quarter, a 23 percent drop compared to a year ago. Of course, it’s worth noting that the new 9.7-inch iPad Pro and iPhone SE both launched at the very end of this quarter, so we’ll have to wait three more months to see what effect they have on Apple’s business.

Just as Tim Cook predicted last quarter, however, Apple’s services business continues to thrive. The services category made $6 billion in revenue, up from $5 billion a year ago. In fact, that makes the services unit bigger in terms of revenue than both the Mac and iPad. As a reminder, services encompasses things like the App Store, iTunes Store, Apple Pay, iCloud and so forth.

Similarly, the “other products” category that includes the Apple Watch, Apple TV, Beats headphones and a number of other hardware products is also growing. Revenues for the quarter hit $2.2 billion, up 29 percent year-over-year. We still don’t know how many Apple Watches the company has sold, but it seems like the category is doing well enough to continue growing.

Apple will be holding its quarterly investor call at 5PM ET, and we’ll be listening in to see how CEO Tim Cook parses out Apple’s first down quarter in more than a decade. Stay tuned to this post for more details!

Source: Apple