Apple posts third consecutive quarterly decline, first annual revenue drop since 2001

By Gadjo Cardenas Sevilla

Apple just posted it's third quarterly decline in revenues as well as the first annual revenue drop since 2001, which was right before the launch of the iPod. Driven by the decline in iPhone sales, which is 64 per cent of Apple's business, the company's revenue shrunk 9.8 per cent from the year ago quarter.

Apple posted quarterly revenue of $46.9 billion and quarterly net income of $9 billion, or $1.67 per diluted share. These results compare to revenue of $51.5 billion and net income of $11.1 billion, or $1.96 per diluted share, in the year-ago quarter. 

iPhone sales dropped 13 per cent year over year other segments, except for Services (which grew 24 per cent to $6.3 billion), Mac sales decline 17 per cent (due mostly to no notable new hardware, which will change on Thursday) and the iPad unit sales declined by 6 per cent even as it was held up by iPad Pro sales. As for Apple Watch, Apple still keeps this information close to its sleeve and we can only speculate on how big a contributor this device is to the overall picture. Note, however, that smartwatch sales have dropped to half the volume of last year, which is indicative of the segment's maturity while consumers continue to get more choice from affordable fitness focused wearables.

“Our strong September quarter results cap a very successful fiscal 2016 for Apple,” said Tim Cook, Apple’s CEO. “We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record.”

While this looks like the end to a tremendous run in Apple's fantastic record-breaking rise in revenues, it is also reflective of the realities in various industries. PC sales are on a monumental downturn, the smartphone market that Apple dominates is saturated with most new markets already getting access to the technology and features. There's very happening in the tablet market which is now pivoting to the 2-in-1 PC space and, indirectly, cannibalizing PC sales. 

Source: Apple