Technology: Apple predicts first decline in iPhone sales

Tech giant Apple's IPhone. Photo credit: Matt Grayson/PA

Tech giant Apple's IPhone. Photo credit: Matt Grayson/PA

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Apple has reported the largest single quarter profit in corporate history, but is predicting the first ever decline in iPhone sales later this year.

The California-based technology giant posted a profit for the quarter ending December 26 of £12.8bn, having sold 74.8 million iPhones in the three-month period.

Our team delivered Apple’s biggest quarter ever

Tim Cook, Apple chief

However, there was iPhone sales growth of just 0.4 per cent, the slowest rate in the history of the Apple smartphone, and a huge drop compared to the 46 per cent growth in sales in the same quarter last year.

But the company’s performance was still enough to break the profit record set this time last year, with sales up 56 per cent on the last quarter too.

Apple chief Tim Cook said: “Our team delivered Apple’s biggest quarter ever, thanks to the world’s most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV.

“The growth of our Services business accelerated during the quarter to produce record results, and our installed base recently crossed a major milestone of one billion active devices.”

All analyst eyes were also on Apple’s guidance for the next quarter, and the company confirmed rumours that it would suggest a drop in revenue - offering guidance that revenue for the second quarter of 2016 would be between £35bn and £37bn, down from £40bn in the same quarter last year.

The results also revealed that Apple sold just over 16 million iPads, as well as 5.3 million Macs.

Luca Maestri, Apple’s finance officer added: “Our record sales and strong margins drove all-time records for net income and EPS in spite of a very difficult macroeconomic environment.

“We generated operating cash flow of $27.5bn (US) during the quarter, and returned over $9bn (US) to investors through share repurchases and dividends. We have now completed $153bn (US) of our $200bn (US) capital return programme.”

Ernest Doku, technology expert at, said: “Most companies would do cartwheels with those kind of numbers but it’s Apple, so anything that’s not astronomical growth is looked at with some fear and trepidation.

“Overall it’s a great performance but shows consumer handset fatigue has set in across the board. In a space where there is so little to excite consumers, we’re seeing even the biggest manufacturers feeling that pinch.”

Mr Doku said Chinese technology firms Huawei and Oppo were “nipping at the heels” of Apple and other popular smartphone makers in the global market.

He added: “I wouldn’t say it’s the end of an era. Apple’s brand is almost untouchable.

“But this shows even the biggest brands are not immune to smartphone fatigue. There needs to be a great deal more to excite consumers.”

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