Apple promises return to growth next quarter after iPhone Q4 sales fall - Mobile World Live

Apple promises return to growth next quarter after iPhone Q4 sales fall

26 OCT 2016

Apple boss Tim Cook described the company’s latest quarterly results as “very strong”, although the picture was not entirely rosy as iPhone sales continued to fall.

The company shifted 45.5 million smartphones during the fiscal Q4 period, a 5 per cent year-on-year decrease. iPhone revenue of $28.2 billion was down 13 per cent.

The CEO said that “demand continues to outstrip supply, but we are working very hard to get them into customers’ hands as quickly as possible”.

Indeed, when asked if the company was benefiting from Samsung’s well documented woes, finance chief Luca Maestri said “it’s not particularly relevant to us right now because we are selling everything that we can produce”.

The company was somewhat non-committal on when supply and demand would match more closely.

The large screen (and more expensive) Plus variant is proving to be something of a hit, with Cook stating that “the mix that we projected on iPhone 7 Plus is short of what the reality is and so we are chasing supply there”. The CEO said that with this device, “we put an incredible amount of innovation into the camera and the overall photo experience”.

iPad shipments of 9.3 million units were down 6 per cent, while iPad revenue of $4.3 billion was flat. The introduction of the iPad Pro line has led to gains in average selling prices, with Maestri stating “we continue to be highly successful both in terms of market share and customer metrics in the segments of the tablet market where we compete.”

On a group level, the company’s quarterly profit of $9 billion was down 19 per cent, on revenue of $46.9 billion, down 9 per cent.

For the full year, profit of $45.7 billion was down 14 per cent, on revenue of $215.6 billion, down 8 per cent. This, according to reports, marks the first annual profit decline for 15 years.

For the next quarter, the company is forecasting revenue between $76 billion and $78 billion. That would mark a return to growth, with Apple forecasting a record-breaking holiday season.

Services growth
Cook talked up growth in Apple’s services business during the fiscal Q4 period, where revenue increased 24 per cent to $6.3 billion. He said App Store revenue “continued to skyrocket”, while Music revenue increased 22 per cent due to the growing popularity of Apple Music.

And the Apple Pay rollout is also continuing: the service went live in Japan yesterday; launched in Russia and New Zealand this month, and will come to Spain “in the next few months”.

Future plans
Unsurprisingly, Cook refused to be drawn on new products, particularly in the automotive and TV sectors. However, he did spend some time boasting about Apple’s efforts in machine learning.

“We’ve been using these technologies for years to create better user experiences, and we’ve also been investing heavily both through R&D and acquisitions. Today, machine learning drives improvements in countless features across our products,” he said.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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