Apple Q1 results a mixed bag, iPhone sales at 74.8m, iPad sales drop, revenue up

Apple earnings are always a huge event but they are hardly ever exciting. Apple reports record sales and high revenue and everyone is left in awe and that is about it. The company’s first quarter results for the year 2016 however are slightly different, in that though Apple is reporting record earnings, it has missed earnings expectations, iPhone sales seem to have reached saturation point and iPad sales have dropped.

Apple said it recorded US$75.9-billion in revenue and with a net profit of US$18.4-billion in its earnings for the financial year Q1 2016 that ended 26 December 2015. That represents a record quarter for Apple on revenue but slightly under what analysts were looking for. Analysts were expecting earnings of US$3.23 per share on revenue of US$76.6 billion.

In its other products, which include the Apple Watch and Apple TV, Apple recorded US$4.35-billion revenue. The same product brought in US$2.7-billion a year ago. This means it has seen a 62% jump in revenue year-over-year.

The iPhone sales, though reaching a record 74.8-million units sold, missed the 75-million units that expects had estimated and only recorded a 1% growth. Compared to last year’s iPhone sales of 74.5-million in the first quarter in the year 2015. Not at all alarming numbers as 74.8-million is a huge number but this is the first since the iPhone was introduced in 2007. Considering that iPhone sales are at the center of Apple’s business, it will certainly be a concern to Apple, and will be interesting to see how it deals with what is effectively its first saturation point.

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According to Luca Maestri, Apple’s CFO, “iPhone sales grew 76% in India, and more than 45% in Korea, the Middle East, and Africa. Sales were also up 20% or more in many western European countries, and grew 18% in Mainland China,”

Apple sold 5.3 million Macs and saw a decline in the number of iPads sold, selling 16.1-million iPads, compared to 21.4 million in the same quarter in the year 2015.

The company appears to not be too positive about the upcoming second quarter. Apple has estimated a revenue in the range US$50 and US$53-billion for the second quarter whilst analyst were looking for US$55.7-billion. Should the company go on to achieve revenue in the range of US$50 and US$53-billion, it will see its first negative growth quarter in a long time. In Q2 last year, the company recorded US$58-billion in revenue.