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iPhone sales plummeted, but Apple Music saved the day

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Apple’s earnings results are in for the fiscal quarter ending June 2016, and the company is reporting lower sales than the previous quarter and the corresponding quarter of 2015.

To be precise, Apple sold 40.4 million iPhone units, 9.95 million iPads, and 4.2 million Macs in the quarter. For the same quarter last year, Apple sold 47.5 million iPhones, 10.9 million iPads, and 4.8 million Macs — this year’s numbers are down across the board. Notably, there’s a 15-percent drop in iPhone sales from a year earlier.

iPhone demand was stronger than what these numbers indicated, as the company reduced inventory by 4 million units during the quarter, according to Luca Maestri, Apple’s CFO. But the lower-than-expected sales are due to slowing demand for smartphones in general. An example can be seen in Apple’s numbers in China — consumers are opting for cheaper handsets, and that has led to Apple seeing a 33-percent decline in revenue from the previous year in greater China.

Still, the collective hardware sales and revenue from Apple’s other services and products totaled $42.4 billion. That’s a lot — but it’s still down from the previous quarter’s total revenue of $50.6 billion, and is 15 percent below the corresponding quarter for 2015, which saw revenue of $49.6 billion.

“We are pleased to report … results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter,” CEO Tim Cook said in the earnings report. “We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC in June.”

As Cook highlighted, the company is boasting of increased revenue from the sale of services. And it’s right to do so — revenue from services, including Apple Music, the App Store, and iCloud storage, jumped 19 percent from a year earlier to $5.98 billion. Still, services are a minor fraction of revenue compared to what the iPhone pulls in.

In the earnings call, Cook repeated how the Apple Watch is the “best-selling smartwatch in the world,” and how the iPhone SE’s demand outstripped supply.

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Julian Chokkattu
Former Digital Trends Contributor
Julian is the mobile and wearables editor at Digital Trends, covering smartphones, fitness trackers, smartwatches, and more…
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