Apple’s iPhone sales keep falling

Apple just announced financial results for its Q4 2016, and it marks the third straight quarter of declining revenues. The company pulled in revenues of $46.9 billion, down about 9 percent from one year ago. As for its key products, each was down as well. Apple sold 45.5 million iPhones, 9.3 million iPads and 4.9 million Macs in the quarter — that’s a year-over-year decline of 5.2 percent for iPhones, 6 percent for iPads and a whopping 14 percent for the Mac. Not a huge surprise, given that Apple has only updated one single computer out of its lineup for all of 2016. (That should change on Thursday, though.)

Apple still isn’t saying how well the Apple Watch is selling, but it’s clear that the popularity of the original lineup had run its course — Apple’s “other products” category (which includes the Watch, Beats hardware, the iPod lineup and other relatively small products) has flattened out in terms of revenue. The company pulled in $2.2 billion in revenue for other products this quarter, down 21 percent from a year ago.

However, with a new Watch out in the wild and the holiday quarter coming, this number should increase significantly when Apple reports earnings three months from now — in the holiday quarter last year, the other services category pulled in $4.4 billion in revenue.

Indeed, this quarter sees Apple in a bit of a holding pattern — the new iPhone and Apple Watch were barely on sale during this period, and the Mac lineup has obviously not been updated yet. But the dual impact of a whole new lineup of products in just about all of Apple’s product categories and the holidays should mean a strong quarter for the company. The question is whether it’ll be enough for Apple to grow its revenue after three consecutive down quarters.

Those three quarters of decline also means this is the first fiscal year in which Apple will not grow its annual revenue — the first time that’s been the case since 2001. For those who don’t remember 2001, that’s when Apple first launched the iPod.

However, Apple’s services business (which encompasses revenue from things like the iTunes Store and Apple Music) remains a bright spot. CEO Tim Cook has spoken positively of it for several quarters now, and once again services revenue grew — $6.3 billion in services revenue this quarter marked a 23.5 percent increase over a year ago. Now doubt the growth of Apple Music contributed to that. Indeed, services remains Apple’s second biggest product category behind the iPhone for yet another quarter.

Apple is holding its traditional conference call with industry analysts at 5PM ET, and we’ll be listening in to update this post with anything CEO Tim Cook chooses to address.

Source: Apple