IPhone sales slump, but Apple’s in it ‘for the long term’

IPhone sales slump, but Apple’s in it ‘for the long term’

The company's investors have been closely tracking the company's share repurchase activity in hopes that it will help buoy the share price, which has fallen more than 30 percent since November, knocking Apple off its throne as the world's largest technology company with a market value of more than $1 trillion. Revenue from the iPhone declined 15% from the year-ago quarter, but total revenue from all other products and services grew 19%.

Typically, Apple's earnings report for the holiday quarter is a sight to behold. Profits, at $20bn, were flat on the same period a year ago.

Those iPhone sales numbers are going to stick out, though, particularly since Apple stopped breaking out unit sales.

Cook said that while it was disappointing to miss its revenue guidance, he was confident about Apple's outlook.

"This is the defining moment for Cook", said Wedbush Securities analyst Daniel Ives. And Cook outlined the reasons why Apple's phone sales took a big hit during the quarter.

Apple said Tuesday that it suffered a rare decline in both sales and profit in the quarter that ended in December - the first time both metrics fell in the holiday quarter in more than a decade.

Apple Inc. projected quarterly revenue that came close to Wall Street's estimates on Tuesday, suggesting a punishing end to 2018 hasn't gotten much worse.

Apple expects revenue of $55 billion to $59 billion for the March quarter, below the average consensus estimate of $59.98 billion, according to FactSet.

Analysts were expecting earnings of $4.17 per share on revenue of $84 billion.


Investors liked what they read and heard, helping Apple's stock recoup some of their recent losses.

Apple shares rose nearly 4 percent in extended trading on Tuesday.

"We wouldn't change our position with anyone's", Cook reassured analysts during a conference call reviewing the past quarter and the upcoming months.

"We generated very strong operating cash flow of $26.7 billion during the December quarter and set an all-time EPS record of $4.18", said Luca Maestri, Apple's CFO.

Apple also confirmed that its battery replacement program that let people pay $29 to upgrade their existing iPhone's battery also hurt sales.

Cook traces most of Apple's iPhone problems to a weakening economy in China, the company's second biggest market behind the U.S. The company is also facing tougher competition in China, where homegrown companies such as Huawei and Xiaomi have been winning over consumers in that country with smartphones that have numerous same features as iPhones at lower prices.

Speaking in an interview with Reuters, Apple CEO Tim Cook has stated the company is re-evaluating its us dollar pricing in markets outside the United States, in an effort to boost sales. (Apple has stopped reporting the number of devices sold.). Meanwhile, WeChat, an all-in-one app for messaging, payments and more, reduces the difference between Apple's iOS and Android.

Revenue in the Services business was $10.9bn, up from $9.1bn.

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