The long-heralded arrival of ‘peak iPhone’ has weighed heavily on Apple’s latest quarterly profits, which have slumped 10% to USD$13bn.
The double-digit decline was precipitated largely by sales of its flagship handset slowing, slumping by 12% over the same period to hit USD$25.06bn.
Despite having first launched over a decade ago, Apple continues to derive over half its profits from iPhone sales, making the waxing and waning of its popularity a key indicator of its underlying health.
In recent times the iPhone has acted as a drag on profits rather than supercharging them as consumers resist the urge to upgrade on an annual cycle just as Apple’s market share is being eroded by a host of Chinese competitors.
On the other hand sales elsewhere at Apple pushed upwards with demand remaining strong for iPads and Mac’s, helping to slowly wean Apple off its own iPhone addiction. The fast-growing services division also recorded a healthy increase of 13% to USD$11.46bn on the back of the App Store and Apple Pay – although this was the smallest quarterly rise in four years.
Revenues for the period inched up by 1% to USD$53.8bn, beating expectations that sales would flatline.
Last month Apple announced the departure of its superstar chief design officer Sir Jony Ive.
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