iPhone sales fall for first time ever as Apple revenue falls
Apple's revenue has fallen for the first time in 13 years as iPhone sales decline for the first time ever, putting an end to the incredible growth streak enjoyed by the world’s biggest listed company.
The company revealed sales of $50.6bn (€44.67bn) for the three months to the end of March, a decline of 13pc. It is the first time since early 2003, when the iPod was just over a year old and the iPhone was four years away from being released, that Apple’s sales have fallen.
The latest set of results will add to arguments that the Californian giant’s best days of growth are behind it, as demand for pricier smartphones flatlines and users appear unwilling to pay for increasingly marginal upgrades.
Sales of the iPhone, which accounts for two thirds of Apple’s revenue, fell for the first time since it was released nine years ago, down from 61 million a year ago to 51 million. Those of the iPad and Mac computers also declined, and quarterly profits were down by 23pc to $10.5bn.
Apple had previously warned that revenues will fall but the results were slightly worse than expected, and the company said it expected sales to drop again in the current quarter.
Shares fell by almost 8pc in after-hours trading, despite the company committing to returning an extra $50bn to shareholders by the end of 2018.
Before Tuesday night’s results, shares had fallen by 20pc in the last year with investors anticipating the decline in iPhone sales, although Apple remains by some distance the world’s biggest listed company.
Chief executive Tim Cook partially blamed “strong macroeconomic headwinds” including the strong US dollar for the decline in sales, which was particularly severe in China.
However, he insisted he was optimistic about Apple’s future, with record numbers of people moving from Google’s rival Android operating system, and that he expects sales to rebound.
Mr Cook also highlighted improving revenues in Apple’s services division, which includes sales of apps and music. Revenue from the services unit grew by 20pc in the quarter and now makes more money than both the iPad and Mac.
The company did not reveal sales of the Apple Watch, the smartwatch it released a year ago, but Mr Cook said the device had “met expectations” and sold more than the iPhone had in its first 12 months.
Last month, Apple unveiled a smaller, cheaper iPhone partially in an attempt to appeal to smartphone buyers in developing markets, and the company said it is facing an order backlog amid strong demand.