Apple revenues drop but 900m iPhones are now active worldwide

Apple revenues drop but 900m iPhones are now active worldwide

Apple revenues drop but 900m iPhones are now active worldwide

Apple's CEO Tim Cook noted that customers were "holding on to their older iPhones a bit longer than in the past".

Revenue from iPhone sales, which constitutes almost 60 per cent of the company's overall income, dropped 15 per cent to $52bn, while total revenue from services and other products grew 19 per cent.

Apple did not say in which countries it would adjust iPhone prices. Its personal free press office, the New York Times, congratulated Apple on beating the analyst's expectations when the figures announced by Jobs' Mob only were a cent better than the analyst average.

The level of iPhone channel inventory, as highlighted by Wall Street Bernstein in our report yesterday, is estimated to be in the four to five million region with a material draw-down of 2 million +.

The results for the October-December period were slightly above the expectations analysts lowered after Cook's January 2 warning.

However, combined, the hole left by weak iPhone sales resulted in a total drop to £64.5 billion, versus £67.6 billion 12 months prior.

Apple has got $130 billion cash in the bank - enough to buy the world's top two most valued startups. Accordingly, sales declined by nearly $700 million compared to the previous year. A smaller premium over other brands makes the iPhone look more affordable, which could help revive sales, the IDC analyst added.

Looking forward, Apple is projecting revenue between US$55 and US$59 billion for the quarter ending in March.

The stock closed down one per cent on the Nasdaq at US$154.68 but climbed in extended trading.

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Still, the iPhone remains the centerpiece of Apple's product lineup, so some analysts remain disappointed by the company's performance in a crucial market for growth.

And Apple combines higher trade-in values with a new monthly payment option to sell more new iPhones. Declining shipments wasn't necessarily a problem for Apple so long as it could increase the price of its phones.

In its revenue call for 2019 Q1, Tim Cook admitted that the overstretched prices of iPhone are a factor behind the disappointing sales this year.

But Cook also said that customers in certain markets were also struggling with Apple's high prices, according to Reuters. It was a clear sign to investors that Apple did not expect its iPhones sales to bring good news moving forward, and that it wanted to shift the focus elsewhere.

Apple's plans for a 3D camera system were pegged for 2019 iPhones, but this has apparently been delayed. There's no doubt that the upgrade cycle has extended and the upgrades for the quarter were less than anticipated for several reasons.

Apple has tried to replace phone sales with services revenue to compensate for the loss. Apple Music now has more than 50 million subscribers, second to Spotify's 87 million streaming subscribers through September.

The California-based company is also looking to build momentum for its Apple TV service, with deals to have it installed on television models coming out this year.

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