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iPhone and iPad sales have fallen year-on-year, according to quarterly reports released by Apple. The announcement led to a more than 2 per cent drop in its stock during after hours trading. However, the report was not all bad news.
Read more: Apple could be about to launch an Amazon Echo rival at WWDC
The numbers revealed that net income for the first quarter was $11 billion versus $10.5 billion the previous year. Revenue was $52.9 billion versus $50.5 billion in 2016. Although iPhone sales were 50.8 million versus 51 million last year, the latest model is costlier and analysts have predicted customers were holding out in order to purchase Apple’s predicted 10-year anniversary device later this year. Tim Cook reiterated this in an interview with CNBC: "We are seeing a kind of delay in purchasing behaviour that we think is a consequence of the number of rumours and reports about future products. That is happening. However, if you look at iPhone outside of greater China, iPhone units grew very nicely. We had more upgraders in the first half than ever before. And we had more switchers than ever before. There is a lot of good news in there."
In a statement from Apple, Cook further commented on the “continued robust demand for iPhone 7 Plus,” and noted that the company had its “highest revenue ever for a 13-week quarter” for its services business, which includes elements such as the App Store, iTunes, Apple Music Subscriptions, Apple Pay and iCloud Storage.
In 2016, smartphone sales declined for the first time in the first quarter, an unprecedented move attributed to an increase in market maturity in places like China, which had seen astronomical growth up until that point. Cook appears to be attributed the slight decline to the same thing.
Apple shareholders – who have received huge payouts in recent years (Apple plans to return a total of $300 billion to shareholders by March 2019) – still have a lot to look forward to, with the expected tenth-anniversary edition and rumours of an Alexa-competitor being released in June at WWDC. A venture capitalist and former Apple analyst, Gene Munster, has predicted that 300 million iPhones more than two years old could be upgraded to the newer model, after a period of relatively bland updates in the last few quarters. The next model is predicted to have some, if not all, of the following: OLED display, face or iris scanning, wireless charging, AR capabilities. And a higher price tag to match.
The predicted Amazon Alexa and Google Home competitor speaker is also expected to be a high quality, high price tag offering. If both products are indeed incoming and launched this year, they may well help reflect the $2.78 billion Apple reportedly spent on R& in the first quarter. Cook told CNBC: "We are investing a tonne in machine learning and autonomous systems."
This article was originally published by WIRED UK
