Wednesday, October 26th, 2016

Apple’s annual profits fall for first time in 15 years

Deepa Dileep | October 26, 2016 5:00 pm Print
The fall in sales was mostly down to declining sales of the iPhone, which is by far Apple’s most important product and accounts for two-thirds of all sales

For the first time since 2001, Apple has reported its first decline in annual sales and profit.

According to a report in The Guardian, the Silicon Valley company, which bounced back from near bankruptcy in 1997, told investors on Tuesday night that it had sold $215.6bn worth of iPhones, watches, Mac computers and other products in the year to 24 September.

That works out as an 8% decrease on Apple’s record $233.7bn of sales it collected in the previous year. This has hit the company’s profits, which fell 14% to $45.7bn.

Sales declined by 9% to $46.85bn in the three months to 24 September – the third consecutive quarterly fall. The sales fall hit the company’s quarterly profits which came in at $9bn – a 19% decline on the same period a year earlier.

The fall in sales was mostly down to declining sales of the iPhone, which is by far Apple’s most important product and accounts for two-thirds of all sales. Apple sold 45.5m iPhones in the quarter, a 5% drop on last year.

Despite the decline in sales and profits, Tim Cook, Apple’s chief executive, said: “Our strong September quarter results cap a very successful fiscal 2016 for Apple. We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2.”

The iPhone, which was first launched in June 2007, transformed the telecom industry, but Apple is now facing more intense competition.

Apple forecast that it would sell $76-$78bn of products in the coming quarter, a 1% increase on last year. The company’s cashpile has grown to $237bn, up from $231.5bn three months ago.

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