iPhone growth grinds to a halt (Wired UK)


Apple made more profit in the previous three months than any quarter in its history, but also saw iPhone sales grow at their slowest rate since the phone’s 2007 introduction.

In its quarterly earnings report, Apple said it sold 74.8 million iPhones in the last three months, just 1 percent more than it did in 2014 when it sold 74.5 million phones.

The iPhone still accounts for around 60 percent of Apple’s profit, which hit a new record of $18.4 billion on revenues of $75.9bn. Apple warned that it expected revenue to be between $50bn and $53bn in the next quarter — the first fall in revenue for the company since 2008, if that holds to be true.

It’s not all bad news, of course. A single quarter profit of $18 billion is more than any public company in history. Some argue — though not Apple CEO Tim Cook — that the ‘law of big numbers’ means that it is by definition more difficult for Apple to keep up the same pace of growth over time. Even if that does not apply in this case, Apple still sold more phones in the last three months than at any period in its history.

Its bottom line was also boosted in a small way by strong sales of its “other products”, which officially includes the Apple Watch and Apple TV, which rose 44 percent quarter-on-quarter to generate revenues of $4.4 billion. It also saw increased revenue in services, which includes apps and Apple Music, up to $6.1 billion up 20 percent in the quarter. But in its core products, Apple is facing tougher times than it is used to.

Alongside slowing growth in the iPhone business, Apple saw sales of tablets decline 25 percent compared to the same period in 2014, to a total of 16.1 million sold, while Mac sales declined 4 percent to 5.3 million. Apple said that overall it now has a billion active devices, which have used its services at some point in the last quarter.

CEO Tim Cook also took pains to stress that the company had still made more profit than at any time in its history, while some analysts pointed to a downturn in China, the fact that the iPhone 6S was intentionally a relatively minor upgrade in its key product line and the overall maturing of the smartphone market for causes of the slowdown.

Cook faced questions from investors and analysts in a following earnings call about how Apple will seek to regenerate interest in the iPad and other key products, after the introduction of the larger iPad Pro apparently failed to halt an overall decline in sales. But he cautioned critics, saying that Apple’s growth would have been 7 percent higher had the dollar fared more favourably in currency markets because the majority of Apple’s revenue is generated overseas. Apple’s chief financial officer, Luca Maestri, added that “a very difficult macroeconomic environment” had contributed to predictions of weaker revenues in the next three months.

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26 January 2016 | 10:20 pm – Source: wired.co.uk


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