In response, he said that iPhone units will decline for the quarter, but didn’t feel that iPhone sales would decline over the entire year period.
Apple’s performance was still enough to record quarterly profits of £12.8 billion but revenues are widely expected to fall this quarter.
During its most recent quarter, the company earned $8.9 billion from installed base services.
Speculation that the second quarter of Apple’s financial year will see a decrease in iPhone shipments will now intensify.
Cook didn’t say whether iPhone sales will drop for the entire year, but he did say he doesn’t think the market is saturated thanks to emerging markets where many citizens have yet to invest in smartphones. The figure is based on the number of iPhone, iPad, Mac, iPod Touch, Mac, Apple TV and Apple Watch engaged with Apple’s service in the past 90 days.
Shares fell to $93.42, knocking off more than $36 billion from Apple’s market value of about $554 billion.
The iPhone maker said that it is anticipating revenue in between $50 billion and $53 billion for the current quarter, marking the first quarterly decline since 2003, and below the consensus forecast of $55.5 billion.
The company is still keeping sales of the Apple Watch under wraps – the only clue in these results was the $4.4bn in sales of “other devices”, up almost two-thirds on the previous year. Although Apple remains immensely profitable, generating a record $18.4 billion in net income.
Leading up to Apple’s earnings announcement, analysts were anticipating Apple’s quarterly revenue to check in at $76.6 billion, with quarterly profits and EPS checking in at $18.2 billion and $3.23, respectively. “We have now completed $153 billion of our $200-billion capital return programme”.
Geoff Blaber, an analyst at CCS Insight, said Apple was “generating industry defying margins” and had cash of nearly $216bn. “There needs to be a great deal more to excite consumers”. Economic weakness emerging in China, one of its largest end markets, was the culprit.