Apple forecast signals end to iPhone boom era - Mobile World Live

Apple forecast signals end to iPhone boom era

27 JAN 2016

Apple reported reasonable revenue growth and net income in its first fiscal quarter but a forecast for the current three-month period cast a shadow.

The company said Q2 revenue will be in the $50 billion to $53 billion range, down from $58 billion in the year ago period. It represents Apple’s first revenue decline in 13 years. On the analyst call, CEO Tim Cook confirmed the company expects a fall in unit sales for the iPhone in the second quarter.

It blamed macroeconomic factors, including slowing growth and currency fluctuations, for a forecast with an end-of-an-era feel to it.

However, the first fiscal quarter was brighter with revenue climbing 1.7 per cent to $75.9 billion and net income up 2.2 per cent to $18.4 billion, giving context to some of the more downbeat reactions to its Q2 forecast.

But the performance felt a long way from the heady times of the year ago quarter when Apple reported 30 per cent revenue growth.

The company sold 74.8 million iPhones in its first quarter, which ended 26 December 2015. This was the first full quarter of sales of the iPhone 6S and 6S Plus, although the performance represented a growth of only 0.4 per cent. That’s the lowest since the handset was launched in 2007.

“We’re seeing extreme conditions unlike anything we’ve experienced before just about everywhere we look,” said CEO Tim Cook.

Markets, including Brazil, Russia, Japan, Canada, Southeast Asia, Australia, Turkey and the Eurozone, have been hit by slowing economic growth, as well as a fall in commodity prices and weakening currencies.

Given two thirds of revenue is now generated internationally, foreign exchange movements have a big impact on Apple’s performance.

Without currency fluctuations, Apple’s sales for the first quarter would have been 8 per cent higher.


Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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