Apple has reported its first significant revenue drop as iPhone sales declined in the quarter.
The US tech giant’s Q2 financial results revealed that global iPhone units plunged to 51.2m, down from 61.2m in the same quarter last year. Apple’s year on year revenues dropped by 13% while in Europe figures also fell, with the biggest decline coming from the Chinese market.
This marks the first time Apple’s smartphone sales have slowed down. The brand has managed to maintain a consistently strong financial performance since the iPhone first launched in 2007.
The results were in-line with forecasts made by Apple at the beginning of 2016 when CEO Tim Cook hinted that tough market conditions would take a toll. This was felt across the industry as rival Samsung also stated that smartphone sales would ‘soften’ in 2016.
Cook reiterated this at Apple’s latest financials, once again attributing macroeconomic factors to the brands product performance which is expected to continue to fall in Q3 of this year.
‘Our team executed extremely well in the face of strong macroeconomic headwinds,’ he said. ‘We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.’
Apple shifts focus
Apple’s slowdown is a sharp contrast from the launch of the iPhone 6s seven months ago, which pulled in record sales as 13m devices flew off the shelves within the first few days of hitting retail shops. The flagship brought in record quarterly results with Cook describing 2015 as ‘Apple’s most successful year ever’.
Since then, the manufacturer has shifted focused onto the mid-tier smartphone market with the recent launch of the £359 iPhone SE. Apple also cutting the price of its Apple Watch after the wearable failed to have the market impact it was expected to.