Apple reports their first revenue decline since 2003. Are they running out of steam?


Apple have just published their fiscal Q2 2016 financial results and it looks like they are showing its first signs of a slowdown. The Cupertino giant have posted a revenue of US$50.6 billion which is a 13% drop when compared to the same period last year (Q2 2015: US$58 bil). What’s more staggering is that this is their first revenue decline in 13 years and another decline is also expected in the next quarter.


Apple, the world’s most valuable company have always been consistent in bringing revenue growth for each quarter. For them to post a decline, sparks a question on whether Apple’s glory days are coming to an end.


So what’s going on? The Apple iPhone 6s is a record seller and the Apple Watch is currently the best selling smartwatch.

To break things down, Apple had sold 51.2 million iPhones, 10.3 million iPads and 4 million Macs with the majority of sales coming from Americas followed by Europe and Greater China for last quarter. The iPhone, their best selling products have dropped in sales by 32% compared to the last quarter and 16% when compared to the same period last year. It is worth pointing out thayt these numbers didn’t include sales from the iPhone SE. For the iPad, Apple is still having a tough time rejuvenating interest as it showed decline despite having a more powerful iPad Pro lineup.

No doubt Apple had shaken up the industry with its runaway success of the iPod, iPhone and iPad, but it seems that they are struggling to create the next big hit in the post-Steve Jobs era. Apple under Tim Cook needs new breakthrough products for growth and it is obvious they can’t continue refreshing its current lineup. In terms of sales, India will be a key focus for Apple, where they believe it has a potential to grow like China. On services, Tim Cook shared that there are 13 million paying subscribers on Apple Music and they are looking into increasing its revenue from its base of over 1 billion active devices.

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In an interview with WSJ, Tim Cook said this was “a challenging quarter,” but denied that Apple was in decline. He mentioned that the recent drop was due to a stronger dollar, difficult economic conditions, and difficult comparisons for iPhone sales. He added “It’s a tough bar to hurdle, but it doesn’t change the future. The future is very bright.”

What do you think? Leave your thoughts in the comments below.


Alexander Wong