For the first time in 13 years, Apple’s sales drop from the previous year. In the first quarter of 2016 Apple sold merely 50 million iPhones, and that’s 10 million less than in the first quarter of 2015. The last time this happened was in 2003 when Microsoft was the leading company in tech and the iPhone still didn’t exist.
This drop puts a lot of pressure on CEO Tim Cook and the whole company. These reports show that the iPhone isn’t the next big thing anymore and Apple needs to make something new to put them at the top again. The impact was big but not life changing for Apple, the Silicon Valley giant was still able to make $10.5 billion in profit from the first quarter.
Although Apple isn’t doing bad by any means, a financial analyst named Angelo Zino who is from S&P Global Market Intelligence, has said that Apple can’t solely rely on iPhones to make most of their revenue and they need to start diversifying their revenue pool. There is still more bad news, after this drop of 13 percent in revenue financial forecasters are predicting another drop in 13 percent in this upcoming quarter, leaving Apple with half the year showing no improvements.
Mac’s and iPads aren’t doing well either, And that’s really sad to see since from the variety of Apple products Mac’s are the thing that we here at FACET News like best.
CFO Luca Maestri defends the iPhone in an interview.
“We think we can continue to bring a lot of innovation to the market,” he said. Whether that may be true or not we don’t know but we do know that there was some good news for Apple during the first quarter. $6 billion of Apple’s revenue in the first quarter was from online services, software, and various apps, he said. That’s actually a pretty good thing for Apple since, in that department it was a 20 percent increase from the same quarter last year. Plus, analysts agreed that this is a number that can rise especially when there are 500 million iPhones in use right now.
Some people said that the Apple Watch was going to be the thing that would have diversified the revenue pool for Apple when it was released 2 years ago but we now know that it wasn’t, especially with so many better Android wear smartwatches. That being said, Apple never did release data on how well the watch did but according to estimations made by analysts, there were 12 million units sold producing $5 billion in revenue. At least that’s twice as much as the amount of the first generation iPhones that were sold.
The reasons for why this quarter was so bad for Apple can be decoded by looking at what products they released this and last year. In September of 2014, Apple released what people have wanted for so long, a big phone, thus leading to the iPhone 6 and 6 plus. The last quarter of 2015, on the other hand, Apple released the iPhone 6S and 6S plus. These phones didn’t have any changes that regular consumers could understand other than 3D touch and that wasn’t a must have feature like a bigger screen, leading fewer people to buy the phone that already had the previous model.
Apple needs to make something amazing again to get their numbers in sales and revenue back up. Something like first iPhone in 2007 or the MacBook Air in 2009, a product(s) that made Apple the company they are today.
Source: The Telegraph