Apple bracing for first sales decline in 13 years, despite iPhone record

SAN FRANCISCO -- Apple is bracing for its first sales decline in 13 years, despite selling a record 74.8 million iPhones in the final three months of 2015.

See Full Article

The giant tech company says revenue could fall at least 8.6 per cent during the January-March quarter, compared with a year earlier. Analysts say the latest iPhone models are selling reasonably well, but they're not providing the boost Apple needs to match the massive sales growth it enjoyed last year.

The company inched past its previous record, established when it sold 74.5 million iPhones in the holiday quarter of 2014. But Tuesday's forecast implies Apple doesn't expect to match the 61 million iPhones sold in last year's January-March quarter.

Apple's stock has been in a slump for months, as investors worry that the company won't be able to duplicate last year's growth in sales, which were in the double-digit percentages. In an interview, Chief Financial Officer Luca Maestri said a strong dollar helped reduce revenue, as sales made with foreign currencies abroad convert into fewer dollars. He also said the company isn't concerned about what he characterized as a short-term slowing of growth, because it has a large base of customers who can be relied on to buy new devices and pay for other services.

"We think we're in the strongest position we've ever been," Maestri told The Associated Press, adding that the company estimates 1 billion Apple devices -- including iPhones, iPads, Apple Watches and Mac computers -- are now in active use.

The iPhone, however, is Apple's biggest-selling product, contributing nearly two-thirds of its revenue and a similar share of profit. Despite the introduction of new models, analysts say global demand for new smartphones isn't growing as fast as it has in recent years. Apple is also confronting an economic downturn in China, one of its biggest markets.

The giant tech company is in no financial danger. It earned $18.4 billion in profit for the October-December quarter, up 1.8 per cent from a year earlier. It had $75.9 billion in revenue, an increase of 1.7 per cent. Earnings amounted to $3.28 a share, which beat the $3.23 average forecast among analysts surveyed by FactSet. Revenue fell short of analysts' estimates, which averaged $76.7 billion.

No one expects Apple to match those results in the current, January-March quarter, as sales traditionally drop after the holiday shopping season and the introduction of new models. But Apple's forecast, which calls for revenue between $50 billion and $53 billion in the current period, means the company will likely fall short of the $58 billion it had a year earlier.

That would be Apple's first year-over-year sales decline since the January-March quarter of 2003 -- long before the company began selling iPhones and iPads. Back then, Apple was a fraction of its current size, reporting quarterly revenue of just $1.45 billion.

While the iPhone has been a phenomenal success, analysts say it's difficult to match the sales surge that Apple enjoyed last year, after it introduced the first iPhone models with significantly larger screens to compete with big-screen phones from rivals like Samsung, which were hugely popular in Asia.

Analysts say last September's release of two more big-screen phones, the iPhone 6S and 6S Plus, made less of a splash because they were viewed as relatively similar to the previous models, despite some new features. Analysts say the slight increase in sales for the December quarter came in part because Apple began selling the newest models several days earlier in key markets such as China.

Apple is expected to release the next iPhone models, with new features, later this year. That could fuel another surge in sales. Along with first-time buyers and people who switch from competitors' phones, analysts say Apple can count on a loyal base of iPhone owners who will buy a new model every two years or so.

Skeptics, however, note that Apple hasn't come up with a blockbuster product to replace the iPhone. The company's latest report showed sales of Mac computers and iPads both declined in the previous quarter.

Apple has introduced new gadgets like a larger iPad for business users and the Apple Watch, along with new online services like Apple Pay, Apple Music and other apps. In a report this week, analyst Colin Gillis of BGC Financial warned that "the big issue for Apple" is whether the company can garner significant amounts of revenue from those new products.


Latest Tech & Science News

  • 'Dota 2' championship makes historic Vancouver move

    Tech & Science CTV News
    This year's edition of eSports' biggest annual tournament, The International "Dota 2" Championships, will take place in Vancouver after six years in Seattle. With a prize pool regularly floating north of US$20 million, The International is a prestige fixture on the eSports circuit. Source
  • Facebook's recurring nightmare: Helping muddy up elections

    Tech & Science CTV News
    MENLO PARK, Calif. -- Facebook has a problem it just can't kick: People keep exploiting it in ways that could sway elections, and in the worst cases even undermine democracy. News reports that Facebook let the Trump-affiliated data mining firm Cambridge Analytica abscond with data from tens of millions of users mark the third time in roughly a year the company appears to have been outfoxed by crafty outsiders in this way. Source
  • U.K. lawmaker: Facebook misled Parliament over data leak risk

    Tech & Science CTV News
    LONDON -- The head of the British Parliament's media committee on Sunday accused Facebook of misleading lawmakers by downplaying the risk of users' data being shared without their consent. Conservative legislator Damian Collins said he would ask Facebook chief Mark Zuckerberg or another executive to appear before his committee, which is investigating disinformation and "fake news. Source
  • Calgary ecologist develops new guidelines to safely move frogs away from human development

    Tech & Science CBC News
    A Calgary Zoo ecologist has helped develop new guidelines to protect frogs, salamanders and other amphibians impacted by human development on the prairies. "Amphibians are really sensitive because their skin will absorb all kinds of environmental contaminants or toxins," said Leah Randall, a population ecologist with the centre for conservation research at the Calgary Zoo. Source
  • One of the driest places on Earth struggles to safeguard its most precious resource: water

    Tech & Science CBC News
    This story is part of our series Water at Risk, which looks at Cape Town's drought and some potential risks to the water supply facing parts of Canada and the Middle East. Read more stories in the series. Source
  • Vibrating muscles help arm amputees 'feel' their prosthetic hand movements, study suggests

    Tech & Science CBC News
    Rob Anderson was fighting wildfires in Alberta when the helicopter he was in crashed into the side of a mountain. He survived, but lost his left arm and left leg. More than 10 years after that accident, Anderson, now 39, says prosthetic limb technology has come a long way, and he feels fortunate to be using "top of the line stuff" to help him function as normally as possible. Source
  • Emojis are everywhere and they're changing how we communicate

    Tech & Science CBC News
    Love them ??or hate them ?, emojis are everywhere, spreading through our texts, social media posts, and emails. They're in our inboxes ?, on the big screen ?, and even being used as evidence ? in courtrooms. Source
  • Canadian hobbyists help shed light on mysterious northern lights phenomenon 'Steve'

    Tech & Science CBC News
    The mysterious light in the sky had appeared so often that Canadian northern lights watchers gave it a name: Steve. Unlike those famous pulsating ribbons of light that stretch across the sky, Steve would appear as a narrow arch of purple light, sometimes paired with green fence-like features. Source
  • Platypus milk has protein with potential to fight superbugs

    Tech & Science CBC News
    The milk of the duck-billed platypus has a unique protein with antimicrobial properties that Australian scientists believe could be a new lead in creating antibiotics effective against superbugs. The platypus is already a strange creature — a venomous mammal with a beaver-like tail and duck bill. Source
  • World's biggest battery in Australia to trump Musk's

    Tech & Science CTV News
    British billionaire businessman Sanjeev Gupta will build the world's biggest battery in South Australia, officials said Friday, overtaking U.S. star entrepreneur Elon Musk's project in the same state last year. The 120MW/140MWh battery storage facility will support a new solar farm at the Whyalla Steelworks, which was taken over by Gupta's GFG Alliance when it bought Australia's cash-strapped steelmaking giant Arrium last year. Source