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Apple Revenues Down 9% as iPhone Sales Fall

Dan Jones

Apple has reported a 9% fall in revenue in the fourth quarter of its 2016 fiscal year as iPhone sales dropped 13% percent year-on-year.

Apple Inc. (Nasdaq: AAPL) reported $46.9 billion in revenue for the quarter ending September, compared with $51.1 billion in the same quarter a year ago. It made a profit of $9 billion compared to $11.1 billion in the same quarter in 2015, a drop of 19%.

The company has been hit by sales declines across its product line but was mainly affected by a slump in iPhone unit sales. It sold 45.5 million iPhones in the quarter, compared to 48.06 million units in the same quarter in 2016.

Most of the sales in the quarter came from the the iPhone 6 and 6S lines. Apple launched the iPhone 7 and iPhone 7 Plus at the end of the quarter. And -- as is typical with Apple launches -- the new devices were in very short supply, as Sprint Corp. (NYSE: S) and T-Mobile US Inc. noted on earnings calls this week. (See Apple iPhone 7 Rides LTE-A Speed Curve to 450 Mbit/s.)

"We are supply constrained on the 7 and 7 Plus," said Luca Maestri, Apple's senior vice president and CFO. "So when you talk about other competitors, it's not particularly relevant to us right now because we are selling everything that we can produce."

Maestri was referencing Samsung Corp. 's recall debacle with its Note 7 "phablet." Both the recall and the Apple launch happened late in the quarter, so the impact of both may be felt more keenly next quarter. (See Samsung's NoteGate: Winners & Losers.)

For all the latest news on wireless, visit Light Reading Mobile.

Certainly US carriers are expecting to have more iPhone 7 units available as 2016 draws to a close. Asked about this on call, Apple CEO Tim Cook said that it is "hard to say."

"I believe that on iPhone 7 we will." Underlying demand for the iPhone 7 Plus, though, is "particularly" strong, the CEO noted.

Apple reported after the market closed on Tuesday. The company's shares were trading down 2.79% at $114.95 after hours.

— Dan Jones, Mobile Editor, Light Reading

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10/27/2016 | 2:55:04 AM
Re: Constrained
Wikileaks revealed that while Apple''s Tim Cook was bragging on 60 minuites about not giving encription codes to the US government, behind the scenes they were also pleading with the US government that because they routinely share metadata with them, they should go easy on them on the Encription thing.  Steve Jobs spinning in his grave.  Granted Americans are captive audience and they can do anything to them without consequence, but do you really think that sharing metadata on Chinese, Russians, Germans, Italians, etc. etc. with US government will help their sales in those countries?   
Mitch Wagner
Mitch Wagner
10/26/2016 | 6:22:30 AM
Constrained supply was ok for Apple when growth was booming. But it's pretty bad under current circumstances.
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