Apple is expected to report its worst quarter, fueled by declines on both sales and profits last quarter, citing concerns over uncertainties as it is currently at a rapidly growing pace and has been considered as the largest tech company worldwide.
The last dropped seen on Apple’s sales was on the first quarter of 2003 year over year basis, and their product, PowerMac, was then the company’s best seller. About 611,000 iPods were sold at that time, considering their iTunes Music Store hadn’t yet launched.
Declining Apple sales are a rarity for the company, thus, analysts anticipate a most unusual occurrence for the last quarter, and they expect a double-digit loss in sales.
Subsequently, Apple has not undergone that kind of ignominious fate since 2001. Windows 98 then became the most dominant computer operating system, and iPod was unknown as it was not yet introduced.
However, the scenario was turned upside down as over two-thirds of Apple’s revenue was boosted by sales on iPhone, suggesting that where the iPhone goes, so goes Apple. Meanwhile, its last quarter was expected to report a miserable one for their signature device.
It was forecasted by Tim Cook that iPhone sales would drop for the first time in history. Earlier in 2015, Cook wrote Apple’s quarter to report positively, leading to a tough comparison, on top of a "dramatically different" for the current economic environment compared to last year.
However, declining sales on iPad, including demand on Mac do not aid Apple’s case.
Conversely, analysts at Apple are making their hopes up that the iPhone 7 can restore the sales growth machine of the company. Meanwhile, the following quarters are expected to bring uncertainties.
It was reported that iPhone sales for the first quarter of 2015 settled for 61.2 million, while for the first quarter of 2016, it has seen sales dropping at 50.4 million or 18%.
Thus, iPhone sales are expected to fall for the first time since the smartphones break-in last 2007.
Conversely, demand for the latest iPhone came slightly strong as what they didn’t expect. About 60% of iPhone users have not initiated an upgrade to the iPhone 6 or 6S, Cook said.
Moreover, iPad sales for the first quarter recorded at 12.6 million, while for the first quarter of 2016, it was forecasted that sales have declined to 10.1 million, or 20%.
Hence, iPad sales are anticipated to drop for the ninth consecutive quarter.
For Mac sales first quarter of 2015, it posted about 4.6 million, while for the first quarter of 2016, it has remained steady at 4.6 million as well.
Meanwhile, PC sales plunged 10% globally in the prior quarter, Gartner stated, suggesting that Apple has been outperforming the whole industry.
Analysts anticipate Mac sales to slightly drop on margins. If speculations were true, Apple Mac sales would lead to its second consecutive fall for the quarter.
The company’s profit for the first quarter in the prior year posted $13.6 billion, while its first quarter of the current year is estimated to fall $11.1 billion, or 18%.
Apple reported earnings last year, making it the most profitable quarter in the history.
Its profit hasn’t declined since the last quarter of 2013.
Furthermore, its sales for the first quarter in the prior year posted $58 billion, while for the first quarter of 2016 was estimated to fall to $52 billion, or 10%.
The company’s sales are anticipated to drop, however, for some, it is expected to generate more revenue in an off-quarter, compared to posted records of 2009.