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U.S. device maker warns iPhone shipments are expected to fall in the current quarter.
Apple late on Tuesday reported flat iPhone sales during the three months to 26 December, and warned that it expects shipments of its coveted smartphone to fall in the current quarter.
The U.S. device maker sold 74.78 million iPhones during its fiscal first quarter of 2016, up slightly from 74.47 million a year earlier. iPhone revenue inched up 1% year-on-year to US$51.64 billion (€47.47 billion).
The forecast for the iPhone does not look good for Apple’s fiscal second quarter either.
"We do think that iPhone units will decline in the quarter," warned Apple CEO Tim Cook, during his company’s quarterly results call.
He said that supply constraints in the fiscal first quarter of 2015 resulted in higher shipments in Q2 2015, as Apple caught up with demand, and that is not the case this year.
"Plus we’re in an environment now that is dramatically different from a macroeconomic point of view than last Q2," Cook said.
"Major markets, including Brazil, Russia, Japan, Canada, Southeast Asia, Australia, Turkey and the Eurozone, have been impacted by slowing economic growth, falling commodity prices and weakening currencies."
Two thirds of Apple’s revenue is now generated outside the U.S., Cook explained, "so foreign currency fluctuations have a very meaningful impact on our results."
Indeed, Apple’s annual revenue growth in China slowed to 14% during the quarter, compared to growth of 70% a year ago. Revenue in the Americas regions fell 4% year-on-year to $29.33 billion, and in Japan, revenue was down 12% to $4.79 billion.
In Europe, revenue grew 4% to $17.93 billion.
Apple generated total revenue of $75.9 billion, up from $74.6 billion a year earlier. Net income came in at $18.4 billion, up from $18.0 billion.
"Our results are particularly impressive given the challenging global macroeconomic environment," Cook said.
While it would be wrong to say that the iPhone is struggling, the word could arguably be applied to some of Apple’s other products.
Sales of iPad tablets fell to 16.12 million from 21.42 million, while Mac sales slipped to 5.31 million from 5.52 million.
Looking ahead, Apple expects to generate revenue of $50 billion-$53 billion in the fiscal second quarter.
