Tumbling iPhone demand drove an uncharacteristic decline in Apple sales in the first quarter, trimming back its profit for the period.
Sales of its iPhone range slumped 15 per cent year on year, and although burgeoning revenue from services like digital media subscriptions – up 19 per cent to a new high of US$10.9 billion – and other products compensated, total sales were down 5 per cent to $84.3 billion.
Sales in China slumped 26.6 per cent during the period.
Net income fell by $100 million, from $20.065 billion in the December 2017 quarter to $19.965 billion in the latest quarter. While the company championed setting “an all-time earnings per share record” that was a consequence of a share buyback program reducing the share pool rather than an improved bottom line.
Commenting on the results, GlobalData Retail MD Neil Saunders said while Apple is still a money-making machine, the sales decline “symbolises a company that is starting to run out of steam”.
“In our view, this is something to be corrected, not least because Apple is a costly company to run and it relies on strong revenue growth to drive up the bottom line. As this quarter’s figures show, failure to achieve that results in profit erosion.”
Saunders said the slowdown in iPhone sales reflected Apple’s inability to come up with meaningful and valuable innovations that wow consumers.
