As many analysts predicted earlier, Apple has reported its first quarterly sales decline since 2003. For the second fiscal quarter of 2016, the company reported a revenue of $50.6 billion and net profit of $10.5 billion.
In comparison to the year-ago quarter, Apple managed to secure a revenue of $58 billion and net profit of $13.6 billion. Understandably, this situation made some critics believe that the iPhone maker has taken a wrong direction and that the company is focusing on areas that are not as important to customers.
In all fairness, some of Apple’s recent decisions have been strange. For example, the company is trying to push a wide array of Apple Watch bands as well as other accessories, instead of focusing on its core product lineup. By taking a look at different Mac models, it can be easily seen that it’s been over a year since the last MacBook Pro release.
Surprisingly enough, the Mac Pro has been updated two and a half years ago, which is plenty of time for other companies to offer more advanced models. Furthermore, numerous rumors and leaks are currently surfacing, showing that the next iPhone (due to be released in September) will be an incremental update, without any major new features that would drive sales.
CEO Tim Cook addressed these concerns in a recently published Fast Company interview. He admitted that Apple can “sometimes fall short”, but that the company is far from any trouble.
He also noted that there are major plans in development, as well as that we should expect Apple to branch into other IT areas. This goes hand in hand with the recently surfaced information that Apple in on track to spend a record $10 billion on research and development in 2016.
This is up nearly 30 percent from 2015, and significantly more than $3 billion per year it was spending just four years ago. With new rumors about the upcoming electronic car, this can easily flare up our expectations.
The good news is that Apple outperformed expectations in fiscal Q3 of 2016. The company managed to secure a revenue of $42.4 billion, versus the $42.1 billion estimate. Some of the surprisingly good results happened in areas like Mac and iPhone SE. In addition, the Services segment secured a revenue of $23.1 billion, in addition to other segments like Music, App Store, and iCloud.
CEO Tim Cook also notes that the iPad demand has rebounded, especially if we take a look at the previous fiscal quarter. The revenue grew 7%, mainly thanks to the recently introduced 9.7-inch iPad Pro. The company has been investing a lot of money and energy into promoting the new iPad Pro as a laptop replacement for business users, and it seems like it had some success in that area. Over half of iPad Pro purchases were made by business users.
Despite its recent financial fluctuations, Apple has nothing to worry. Even if this year’s iPhone fails to achieve massive success, reports are already predicting major success for the next year’s model. This is because the company is planning something special for the iPhone’s anniversary, and it definitely needs something that will make an impact on today’s market. After all, this tech giant is perhaps the only company that can afford a few declining quarters.