Apple’s struggled to make money from iPhone sales in Q2 2017

iphone apple macbook foxconn

While Facebook and Google make most of their money from advertising, Apple’s in an altogether different boat.

The company published its Q2 2017 financial results Tuesday, revealing its rises and falls in bank balance over the previous three months.

“We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus,” Apple CEO Tim Cook states.

“We’ve seen great customer response to both models of the new iPhone 7 (PRODUCT)RED Special Edition and we’re thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter. Looking ahead, we are excited to welcome attendees from around the world to our annual Worldwide Developers Conference [WWDC – ed] next month in San Jose.”

Before WWDC and Apple’s future launches, it’s worth noting where the Cupertino giant excelled this past quarter.

The company raked in US$52.89-billion in total revenue, acquired mainly (65%) from international sales of the iPhone, iPad, Mac and services. That’s a slight growth of around US$2-billion over the same quarter in 2016.

In terms of sales, around 50.76-million iPhones were sold in Q2 2017. While Apple also sold a combined 8.9-million and 4.1-million Macs in the same quarter.

iphone 7 red apple

Not even the red iPhone could buoy sales in China or the Americas

But here’s the bad news.

Considering that Q2 usually falls within the lull of post-iPhone launch and pre-WWDC reveals, Apple’s revenue slumped by 32% over the previous quarter. But that revenue wasn’t lost in a single segment either.

The Americas, Europe, Greater China and the “Rest of Asia Pacific” all tanked more than 30% (pdf) over the previous quarter.

Notably though, Greater China’s quarterly revenue figure was the only one to dip both quarter-over-quarter and year-over-year, recording 14% less revenue.

That’s mainly down to iPhone sales, a figure that Tim Cook seems to believe is still a member of consumers’ wishlists. iPhone sales worldwide dipped by 35% in Q2 2017.

On a lighter note, revenue accrued by services only dropped by US$100-million over Q1 2017, suggesting that the likes of Apple Music and the App Store are riding a steady wave. Current subscriber numbers to Apple’s online services are up around 15-million, now peaking at 165-million.

But what’s the real reason for dipping revenue, slowing sales and the waning interest displayed towards the iPhone brand?

Tim Cook blames iPhone 8 rumours.

“[W]e’re seeing what we believe to be a pause in purchases on iPhone, which we believe are due to the earlier and much more frequent reports about future iPhones,” Apple’s CEO reportedly told investors during a call.

Suggesting that iPhone sales could be affected by rumours isn’t perhaps as far-fetched as one would think.

News surrounding the iPhone 8 suggests radical changes are incoming, including a Touch ID sensor embedded below the screen and an OLED screen.

But that launch will likely take place in September, and between now and then, there’s the small matter of the next financial quarter for Apple to negotiate.

Despite its services providing good news to investors, Apple predicts that revenue will fall once again in Q3 2017 to between US$43-45-billion.

Andy Walker, former editor


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