Apple Q2 2016: Revenue declined first time in 13 years

As predicted by Apple CEO Tim Cook earlier this year, Apple Inc. posted its second quarterly earnings indicating the first-ever decline in iPhone sales in nine years.

Apple reported a quarter revenue of US$50.6 billion (AU$66.01 billion) as compared to US$58 billion (AU$75.67) in same quarter in the previous year. The dwindling sales of the iPhones have been the main reason behind the decline in revenue by 13 percent in Q2 2016.

The over saturated smartphone market has resulted in a drop in iPhone sales all over the world. Apple said that it sold only 51.2 million iPhones in Q2 2016, down from 61.2 million in the same quarter in 2015.

Ever since its introduction in 2007, Apple boosted consistent growth of iPhones for the past eight years.

The company’s revenue dropped considerably in China, the second most important market for Apple after the U.S.

However, the Services division including Apple Music and App Store continues to grow. Its revenue surpassed iMac sales and is up by 20 percent to $6 billion.

“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,” said Tim Cook.

According to Apple’s chief financial officer, Luca Maestri, the success of the iPhone 6 in the previous year has set a difficult yardstick to match upon, reports Reuters. Cook also admitted that the higher price tag of the iPhone 6s also hindered the growth in the second quarter.

In anticipation of the declining sales of the high-end iPhones last quarter, in March, Apple released its most awaited 4-inch iPhone SE. The Cupertino-based tech giant is expected to release it upcoming flasghip, the iPhone 7 at its annual fall event in September.