On April 26, Apple reported its 2016 second quarter financial results, and for the first time in 13 years, it is facing a decline in quarterly revenue. We’re so used to seeing record revenues from Tim Cook’s company, but you cannot deny that you didn’t see this coming. A quick look at the numbers will shine a light on where this inevitable slump sprouted from.
Apple posted a quarterly revenue of $50.6 billion and record quarterly net profit of $10.5 billion. Compare this to one year ago, that’s down from revenue of $58 billion and net profit of $13.6 billion. Says CEO Tim Cook in a press release: “Our team executed extremely well in the face of strong macroeconomic headwinds. We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”
iPhones took a hard hit this quarter, with 51.2 million units sold, compared to 61.2 million in the year-ago quarter. iPads also went on a noticeable decline, with 10.3 million units sold, compared to 12.6 million. Same story for Mac, with 4 million units sold, compared to 4.6 million. Across the board, as you can clearly see, Apple had a tough time living up to its record-breaking numbers this quarter across all three of its major product categories including phones, tablets, and computers.
Now, there is a bright spot among this dour news, and you’ll find it in a category Apple calls Other Products. Though Apple does not report units sold for iPod, Apple TV, and Apple Watch, it does share the overall revenue those products accumulated in the quarter. Other Products amassed $2.2 million in Q2 ’16, up from Q2 ’15’s $1.7 million. In addition, and as Cook mentioned in his quote, Apple’s Internet-connected Services sector (read: iTunes & App Stores, Apple Music) is also on the rise reaching $6 million in revenue, up from the year-ago quarter’s $5 million.
Despite the optimism there, however, Apple’s stock dropped some points following news of the overall quarterly revenue decline. With Apple’s Wordwide Developer’s Conference (WWDC) around the corner, here’s to hoping the tech giant (and still the world’s most valuable company) has some exciting announcements up its sleeve (iPhone 7? iOS 10? The shrouded in mystery Apple Car?) to pick up some forward momentum!
Looking ahead to the third fiscal quarter of 2016, Apple CFO Luca Maestri expects revenue between $41 billion and $43 billion.