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Apple’s iPhone sales have suffered another loss, despite the company beating its financial forecasts for the third quarter.
Apple had previously suffered its first sales slump in over a decade, leading to concerns that its iPhone market – which makes up two-thirds of the company’s earnings – was in decline. But although the company have beaten their prediction for the last quarter, the iPhone is still in decline having experienced a 15% drop.
The tech giant reported that they’d generated $42.4 billion in revenue, which is a pretty heavy loss compared to the $49.6 billion it generated in the same time period last year. This is largely as a result of fewer people purchasing new iPhones, with the launch of the iPhone SE still failing to reverse Apple’s fortunes in any meaningful capacity, as the company shifted 40.4 million devices this quarter compared to the 51.2 million it sold this time last year.
Though Apple’s stock rose by 7%, which is a good sign for investors, the company’s gross margin fell from 39.7% to 38%. CEO Tim Cook also outlined the struggles the company is having in China, with them bringing in $8.9 billion in revenue this quarter, compared to the the $13.2 billion they generated in the same quarter last year. Considering that China accounts for a quarter of all Apple sales, the company needs to work hard in this region to bolster its profits once again.
Apple is also having trouble shifting its other products, with iPad sales falling from 10.9 million to 10 million YOY, while Mac sales slumped from 4.8 million to 4.3 million. However, Apple did report good news for its iPad Pro, which has led to the company generating more profit from its iPad market despite the fewer sales, raking in $4.9 billion compared to last year’s $4.4 billion.
Apple’s services are also making steady improvements, with the likes of its Music and Health apps leading to the company generating $6 billion in revenue in this area, a mammoth 19% jump. Unfortunately, the company’s “Other Products” category – which includes the Apple Watch – fell from $2.64 billion to $2.22 billion, which isn’t a great sign considering the time and money Apple has invested in broadening its range of products.
Though Apple have beaten their initial sales forecast, it still isn’t great news for the company, with them continuing to experience losses in China along with struggling to get consumers to purchase new iPhones. With the iPhone 7’s reveal and launch around the corner, Tim Cook & co. will be hoping that the new device will see them return to the kind of record-breaking profits they saw with the launch of the iPhone 6.
