×
You will be redirected back to your article in seconds

Apple Sees Business Decrease During Holiday Quarter; iPhone Revenue Down 15%

For years, continuous growth has been a given for Apple investors. On Tuesday, that success story came to a screeching halt: The iPhone maker generated billions less in revenue during the quarter ending on Dec. 29 than it did during the same time in 2017.

The sole culprit for this decline was the company’s iPhone business, where revenue dipped 15% year-over-year. “Our customers are holding on to older iPhones a bit longer than in the past,” said Apple CEO Tim Cook during the company’s earnings call Tuesday afternoon.

That’s not to say that Apple isn’t still a very profitable business. The company generated $84.3 billion in revenue during the holiday quarter, compared to $88.3 billion in revenue during the same quarter in 2017. Diluted earnings per share came in at $4.18, compared to $3.89 a year ago. In fact, those earnings per share represented a new record, which resulted in investors sending the stock up 8.5% in after-hours trading.

Apple had previously warned investors that a decline in its China business would lead to lower-than-expected revenue for the quarter. The company revised its revenue guidance for the quarter from $91 billion to $84 billion in January, at the time leading to a massive sell-off from investors.

“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” Cook was quoted saying in the company’s earnings release.

Adding to the uncertainty was the fact that for the first time, Apple didn’t disclose the number of iPhones it sold in the quarter. The company had announced this step during its fiscal Q4 earnings report in November, with chief financial officer Luca Maestri telling investors at the time that the average sale price of an iPhone was ultimately more material to the company than the total number of devices sold. “A unit of sale is less relevant to us today than it was in the past,” Maestri said.

But even without those numbers, Tuesday’s release showed that the company missed on iPhone sales. The company sold close to $52 billion worth of phones during the quarter, down from $61.1 billion a year before. Mac and iPad revenues, on the other hand, were both up, 8.7% and 16.9% respectively. Service revenues were also up 19% year-over-year, at close to $10.9 billion.

The company also disclosed that it now has 1.4 billion active devices in the market, including 900 million iPhones. “Our ecosystem is stronger than ever before,” Cook said.

Apple’s earnings report came a day after reports about a serious security flaw involving the company’s Facetime video chat software emerged. That flaw allowed users to spy on unsuspecting iPhone owners simply by giving them a call, with microphones capturing audio even if a call wasn’t picked up. Apple has since temporarily disabled group calling, but has yet to roll out a software update for a more permanent fix.

More Digital

  • The Frontier

    Conecta Fiction: Project Pitches Prizes Passed Out in Pamplona

    On Wednesday evening the Spanish city of Pamplona was overrun, not by bulls, but by hopeful TV creators who had spent the early week pitching their projects at Conecta Fiction, and who anxiously waited to find out the titles which would take home silverware. Meanwhile, “Monzón,” a Disney-Pampa-Incaa production portraying the tragic violence of Argentine [...]

  • YouTube logo

    Why Splitting Up YouTube Is a Terrible Idea

    Facing mounting pressure over failures to protect children from inappropriate content, Google is reportedly considering a number of changes to its video sharing site YouTube. The Wall Street Journal reported Wednesday that one of the ideas circulated internally was to effectively split up YouTube, and spin out all children’s content into the existing YouTube Kids [...]

  • Niantic's Harry Potter: Wizards Unite Game

    ‘Harry Potter: Wizards Unite’ to Launch This Week

    “Pokemon Go” maker Niantic is getting ready to launch its next big game: “Harry Potter: Wizards Unite” is set to launch in June 21, the company revealed in a tweet this week. The worldwide launch of Harry Potter: Wizards Unite begins this Friday, June 21! Keep your eyes peeled and wand ready for more information [...]

  • google podcast creator program

    Google, PRX Unveil Second Slate of Their Podcasts Creator Program (EXCLUSIVE)

    Roughly a year after first unveiling its podcasts creator program, Google is renewing its commitment to train budding podcasters. Together with public radio and podcast distributor PRX, Google has chosen 6 podcasters from around the world to participate in the next round of the creator program. The podcasts included in the second cohort are “37 [...]

  • Camila Cabello

    Camila Cabello Reveals Podcast Obsessions, Teases New Album at Cannes Lions

    Camila Cabello was the featured speaker at a Tuesday afternoon panel at Cannes Lions, the annual gathering of marketing, design and entertainment professionals in the south of France. Joined by Spotify chief content officer Dawn Ostroff, the talk, moderated by Variety editor Shirley Halperin, was centered around the theme of the golden age of sound [...]

  • Meg Whitman and Jeffrey Katzenberg

    Quibi Has Already Booked $100 Million in Ad Sales, Jeffrey Katzenberg and Meg Whitman Say

    Quibi, the ambitious short-form video venture from Jeffrey Katzenberg and CEO Meg Whitman, has sold $100 million in upfront ad inventory with six advertisers ahead of its April 2020 debut. Advertisers that have committed ad spending to Quibi include Google, Procter & Gamble, PepsiCo, Walmart, Progressive and AB InBev, according to the company. The $100 [...]

  • China's iQIYI Signs Content, Channel Pact

    China's iQIYI Signs Content, Channel Pact With Malaysia's Astro

    Astro Malaysia, Malaysia’s leading pay-TV operator, has struck a strategic agreement with Chinese streaming platform iQIYI. Astro obtains the exclusive rights to deliver iQIYI content on TV, on-demand and via OTT in Malaysia. It will launch the first iQIYI-branded channel comprising iQIYI’s extensive slate of original content from drama to variety shows and movies. Astro [...]

More From Our Brands

Access exclusive content