Apple profits dip for first time in 15 years

By:
James Pearce
Published on:

Californian smartphone-maker saw sales of iPhones fall 5% in latest quarterly results

Sales of the iPhone have fallen for the third quarter in a row, as Apple’s annual profits fell for the first time in 15 years.

The Californian manufacturer shipped 45.5 million iPhones in the three months to 24 September, down 5% on the same quarter in 2015. Apple sold $215 billion worth of hardware in the last year, down 8% on the previous financial year.

This decline in sales also hit profits at the American company, the most valuable in the world in terms of market capitalisation, as it posted a 14% decline to $45.7 billion.

Apple’s sales and profits have grown every year since 2001, driven by sales of iPhones, Mac computers, iPads and tablets.

Despite the decline in sales and profits, Tim Cook, Apple’s chief executive, said: “Our strong September quarter results cap a very successful fiscal 2016 for Apple. We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2.”

Apple’s latest flagship smartphone, the iPhone 7, went on sale on 16 September, but the firm said it expects to see the biggest uplift from sales in the final three months of 2016, which includes Christmas and Thanksgiving.

Samsung, the world’s biggest smartphone vendor in terms of sales and Apple’s nearest rival, has had problems with its Galaxy Note 7 range, which was recalled after reports of the devices exploding. This is also expected to benefit Apple, as users look for an alternative handset.

Apple has predicted it will sell around $76-$78 billion of products in the coming quarter, up 1% on last year.

CCS Insight analyst Ben Wood said the quarter was unrepresentative of Apple’s trajectory overall.

”All eyes will be on iPhone numbers and growth in Apple services. Analysts will also be looking to glean anything about expected performance of iPhone 7 in the all important fourth quarter.”

“This is expected to be the first quarter of volume declines for Apple,” he explained. “It is exacerbated by blow out sales of the iPhone 6 a year ago, but the iPhone 7 will give a substantial boost in Q4”

“Some reports will focus on Apple having a weak quarter which ignores the fact that it continues to be the most profitable device maker on the planet and there seems little evidence that will end any time soon.”