Apple's Last Quarter Wasn't Great: Revenue Down, Profits Down, Hardware Down

Now its hard to say a company that turned in $9bn in profit had a bad quarter, but by Apple's ridiculously high standards, this was a bad quarter. The company generated less revenue, created less profit and saw falling hardware sales in a perfect storm that saw Apple have a 'down' financial year for the first time since 2001.

Revenue fell by 9% globally, with China being a stand out, year on year Apple was off  by 30% there.

Hardware sales were down across the board too, off between 5% (iPhone) and 14% (Mac). The imminent announcement of new MacBook hardware probably exacerbated the decline in Mac sales, however the iPhone drop off in sales should be more of a concern, reflecting as it does the same transition period between models of the previous year.

It's inevitable that the next iPhone will offer a bigger update than the disappointing iPhone 7.

iPad volume continues to fall, although the introduction of the more expensive Pro models meant that revenue stayed the same. Those customers buying iPads are migrating towards the high end devices, something that I'm sure will be reflected in the next iPad  refresh, whenever that happens.

Apple's 'Other' category was down in revenue by 22%, although this is more easily explained. We know that Apple Watch sales were 2.8m shy of the same quarter in 2015, in anticipation of the arrival of the Watch 2. At an average selling price of $269 that reduction in Watch sales entirely accounts for the $700m shortfall in revenue.

Apple's 2016 FY hasn't been a disaster, however there are signs customers are wanting to see more from Apple than just humdrum updates or the additions of 'me-too' features. I'm struggling to think of a recent Apple innovation which actually set my technology glands tingling.

That's Apple's biggest risk right now, the maturity of its products and the market in general change the perception of the company from exciting and innovative to boring and out-dated.


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