Apple’s iPhone super-growth era weakens; foresees first sales dip in 13 years

By @s_rituparna on
The Apple logo Is Pictured Inside The Newly Opened Omotesando Apple Store
The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo in this file photo taken June 26, 2014. Reuters/YUYA SHINO

Blame it on the unpredictable market situation in some economies (including China), but for the first time in more than a decade, Apple, the world’s most valuable company by market capitalisation, foresees a drop in sales in its second quarter ending March 2016.

According to Reuters, the Cupertino-based tech giant predicts its first revenue dip in 13 years. The company expected the fall of iPhone sales this quarter, compared to the same quarter last year, confirmed Chief Executive Officer Tim Cook on a conference call with analysts.

The company sold 74.8 million iPhones in the quarter which ended Dec. 26, marking the lowest-ever increase in shipments since its launch.

Due to the considerable drop in iPhone shipments in the US and Japan, Apple’s revenue in fiscal first quarter ending in December increased only by two percent as compared to 30 percent in the same period in previous year, reports The Financial Times.  

With no other products lined up to replace the iPhone, this situation seems to be worrying, suggest Wall Street analysts. J.J. Kinahan, chief strategist at TD Ameritrade, believes that without a well-etched out plan to increase sales or introduce a new product, the pressure on shares will continue to mount.

The slowing smartphone market and the introduction of a wide range of mid-range and budget handsets could see the decline of the Apple iPhone growth era. Cook mentioned that the sale of iPhone units will decline but not as extreme as estimated by analysts.

The company forecast its second-quarter revenue to be between US$50 billion and US$53 billion. Last year, during the same quarter Apple reported a revenue of US$58 billion. Apple has expanded in China and tried to broaden its business in order to reduce its dependency on iPhones.  

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