Drop in sales for Apple

First revenue decline in 13 years but Indian market is strong

Business & Politics

Freestyle

News - Biz@India

April 29, 2016

/ By / New Delhi



Apple witnessed a decline in its revenue sales for the first time in 13 years, by around 13 pc. But the Indian market remains strong with a 56 percent year-over-year growth in iPhone sales.

On April 26, 2016, Apple Inc., an American multinational technology company reported a fall in its quarterly sales by nearly 13 pc. In 13 years, this is the first time when the company witnessed a drop in its shares.

Last year, Apple’s quarterly revenue was 58 billion dollar whereas it dropped to 50.6 billion dollar this time. As a result, net income is also down to 10.5 billion dollar from 13.6 billion dollar in 2015.

Reduced sales of iPhone, iPad and Mac are the primary reasons behind the fall in revenue. iPhone sales declined by 16 pc as compared to last year from 61.2 million to 51.19 million units. This lead to a fall in revenue of around 8 billion dollar.

India remains a bright spot though, compared to the US, Europe and China, more mature markets, where Apple has a hard time boosting its sales. India is sometimes called by analysts the “next China” for the US giant, as there is a lot of room for expansion in a booming smartphone market.

The pricing question in India

Pricing remains the key question, as the Indian market is very price sensitive, with almost 70 per cent of the smartphone sales being below 150 US dollars. Whereas Apple has clearly positioned its recent products in the upper segment of the Indian market.

Apple expects its global revenue to be in the 41-43 billion dollar range and profit margins between 37.5 and 38 pc. According to the company, the demand and sale for iPhone 6 and iPhone 6 Plus were incredibly high and it’s hard for the “S” versions of the iPhones to keep up with the trends.

Apple’s revenue fell by 10 pc in America, while in China and in Asia Pacific it dropped by 26 pc and 25 pc, respectively. However, the sales in Japan increased by 24 pc.

The iPad sales dropped by 19 pc, from 12.60 million units to 10.25 million units, while the Macs witnessed a drop of 12 pc, from 4.6 million units to 4.03 million units.

“Our team executed extremely well in the face of strong macroeconomic headwinds. We are very happy with the continued strong growth in revenue from services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices,” said Tim Cook, Chief Executive Officer of Apple Inc.

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