iPhone sales continue to shrivel in Apple’s fiscal fourth quarter

Apple closed out its fiscal 2016 today with fourth-quarter revenue of $46.9 billion, down from $51.5 billion a year ago, and net income of $9 billion, down from $11.1 billion. The company's gross margin fell to 38% from 39.9% a year ago. The company made 62% of its revenue from international sales.

iPhone sales are where Apple makes most of its bacon, and the company took in $28.2 billion from 45.5 million iPhone sales. Those numbers are down from last year's 48 million units and $32.2 billion in revenue—a five-percent decline in unit sales and a 13% decline in revenue. The iPhone 7 and iPhone 7 Plus, introduced a little over a month ago, do seem to be moving well, however. Apple recorded a 13% sequential increase in iPhones sold and a 17% sequential increase in iPhone revenue.

Other areas of the company's business aren't popping any corks today, either. iPad unit sales contracted six percent from a year ago to 9.2 million units, and iPad revenue was flat year-on-year at $4.2 billion. Mac sales contracted 14% to 4.9 million units, and Mac revenues declined 17% to $5.7 billion. The company's "Other Products" raked in $2.4 billion, down 22% from this time last year. Without further details, it's hard to say what other products are responsible for that drop.

Services revenue was the only area of growth in Apple's still-gobsmacking pie. The company took in $6.3 billion from its services business, up 24% from this time last year.

Apple expects a flush first quarter for its fiscal 2017. The company projects revenue of $76 billion to $78 billion, gross margins of 38% to 38.5%, and operating expenses between $6.9 billion and $7 billion in the next quarter.

Comments closed
    • quasi_accurate
    • 3 years ago

    Interesting how different sites are reporting the same information using titles that convey very different feelings:

    Positive (AppleInsider):
    Wall Street positive on Apple’s Q4 earnings, bullish on iPhone 7 holiday sales

    Negative (Tech Report):
    iPhone sales continue to shrivel in Apple’s fiscal fourth quarter

    Neutral (Ars Technica):
    Apple is 19 percent less profitable in Q4 of 2016 than in Q4 of 2015

      • tipoo
      • 3 years ago

      I used to go on AppleInsider but had to stop as their extremely spun headlines started grating on me. I like Apple stuff just fine and I’m sure at some point someone online has called me a fanboy, but man, are they *fanboys*. Some of the commenters were decent though, I think some are here on TR.

    • derFunkenstein
    • 3 years ago

    MacRumors keeps track of the last refresh of revery Mac and iDevice. The Mac page is depressing:

    [url<]http://buyersguide.macrumors.com/#Mac[/url<] Apple can't possibly be wondering why Mac sales are down. I just have to wonder what these idiots in Cupertino are thinking.

      • sweatshopking
      • 3 years ago

      not just the mac page either. Only things labeled buy are new apple watch and iPhone. the rest are not.

      • Vhalidictes
      • 3 years ago

      They are probably thinking that they sell phones. Single-product companies do great… but only for a time.

      Apple needs to go back to being a general computer company again; It’s a matter of long-term survival.

      • End User
      • 3 years ago

      The idiots in Cupertino have some [url=http://www.apple.com/apple-events/october-2016/<]new products on the horizon[/url<].

        • derFunkenstein
        • 3 years ago

        Yes, that’s kind of the problem, isn’t it? Most of these products haven’t seen even a spec bump in nearly 18 months. Most of them are basically using the same stuff that came out 3 years ago.

          • End User
          • 3 years ago

          I am disgusted by the current state of Mac products.

            • sweatshopking
            • 3 years ago

            what about the rest of the non-iPhone lineup which macrumors also lists as don’t buy?

    • ronch
    • 3 years ago

    Well, I’m kinda guessing many Apple fans are finally getting a hint that Apple isn’t the only company that makes great phones.

    • moog
    • 3 years ago

    No One Is Buying Smartwatches Anymore
    [url<]http://gizmodo.com/no-one-is-buying-smartwatches-anymore-1788153001[/url<] "This is bad news for all smartwatch vendors (except maybe Garmin), but it’s especially bad for Apple, which saw shipments drop 71.6 percent, according to the IDC report"

      • designerfx
      • 3 years ago

      How does this surprise anyone? Gizmodo being a gawker blog and having dumb opinions being one issue, but also:

      Garmin is the only one who made a smartwatch that has all the functions people expect but lasts 2-4 weeks. 2 to 4 weeks.

      Every other smartwatch and similar item (apple, LG, samsung, jawbone, fitbit, misfit) last ~1-3 days and commonly don’t have GPS in them/can’t function without a watch. Literally nobody is competing with Garmin at the moment. Apple watch sounds nice in concept until you have to recharge it every other day.

    • FireGryphon
    • 3 years ago

    If only this was actually a problem for Apple, perhaps they’d fix the little quality issues that used to separate them from the rest of the pack.

      • moog
      • 3 years ago

      Both of my last 2 iPhones died within 2 yrs. Personally I don’t think iPhones are better built than the competition.

        • sweatshopking
        • 3 years ago

        they’re not, and the 6 series were actually some of the least reliable phones on the market. [url<]http://bgr.com/2016/08/25/iphone-vs-android-reliability-comparison-study/[/url<]

          • tay
          • 3 years ago

          From that study

          The study uses the term “failure” to cover a wide range of both first-party and third-party issues. Failures can be anything from Wi-Fi connectivity issues and headset malfunctions to phone reboots and third-party app crashes.

          So it’s basically click bait not worthy of the name study.

            • sweatshopking
            • 3 years ago

            No, it isn’t, but it doesn’t deal with first party hardware specifically. It deals with a total user experience, and while I prefer apple to google, clearly apple has some issues regarding the complete consumer package.

            • HERETIC
            • 3 years ago

            See my post below-Class action lawsuit to me means UNRELIABLE.

    • HERETIC
    • 3 years ago

    Seems the RDF is wearing and the sheep are starting to use their braincells-and
    [url<]http://www.techspot.com/news/66144-apple-sued-over-iphone-6-touch-disease-hardware.html[/url<]

      • NovusBogus
      • 3 years ago

      It probably doesn’t help that anything made after 2014 is still good enough for typical use, especially on the tablet side of the fence. That’s what, 2-3 generations of iStatusSymbol?

        • kvndoom
        • 3 years ago

        Welcome to Stagnation Island. We PC owners have been here for some time. Have a cold one and relax.

    • End User
    • 3 years ago

    [url=https://talkshow.im/show/FGMbNOS2RmibgxWQ<]The shrivel in more glorious detail[/url<].

      • sweatshopking
      • 3 years ago

      [url<]http://arstechnica.com/apple/2016/10/apples-q4-2016-more-money-from-services-cant-offset-slower-hardware-sales/[/url<]

    • End User
    • 3 years ago

    Revenue met guidance from previous quarterly statement so zzzzzzzzzzzzzzzzzzzzzzz.

    Newsflash – revenue for Q1 2017 will be between $76 billion and $78 billion (a hair above Q1 2016 revenue of 75.9 billion).

    • Billstevens
    • 3 years ago

    I’ve got to wonder if in quarterly meetings they feel these are bad numbers. Still an amazing amount of money and I can’t imagine they are losing much market share especially given Samsung lighting one their flag ship phones on fire.

      • dyrdak
      • 3 years ago

      Exactly, the “free” upgrade offer served by Samsung will help Apple more than the patent infringement lawsuit they’ve fought for years.

      • kvndoom
      • 3 years ago

      Only Wall Street can see the negative in 9 billion dollars net income.

        • floodo1
        • 3 years ago

        So true!

        • NovusBogus
        • 3 years ago

        Only Wall Street would declare that a single company is ‘worth’ on paper more than the GDP of Taiwan or Saudi Arabia.

          • ImSpartacus
          • 3 years ago

          Having over two hundred billion usd in your warchest certainly helps.

            • JustAnEngineer
            • 3 years ago

            Avoiding paying taxes on those earnings helps, too.

          • Anomymous Gerbil
          • 3 years ago

          Huh? You’re falling into the common trap of comparing two quite different things.

          In any case, a company’s value is pretty easily deduced from expectations of earnings and future interest rates. There’s no magic involved, apart from trying to forecast those things with any accuracy.

    • hasseb64
    • 3 years ago

    Who buys a Ipad nowadays? Third World? China?

      • odizzido
      • 3 years ago

      They could get far more capable systems for less money.

      • sweatshopking
      • 3 years ago

      not china anymore. see that trend? sales shrinking FAST in china.

      • Concupiscence
      • 3 years ago

      People whose last iPad broke, for starters… The tablet market’s not something I fully understand, but they do matter. They just don’t need to be replaced with clockwork regularity.

        • hasseb64
        • 3 years ago

        Yes, guess you are right! I have bought 2, 1 for replacement. But that’s it, no more Ipads in my life..

      • ronch
      • 3 years ago

      No, people in the third world are too poor to buy Apple products to make a huge impact on Apple’s numbers. Maybe people like you in the first world aren’t buying as many Apple wares anymore? /S

        • Voldenuit
        • 3 years ago

        Yep. Not only are Apple products expensive, they are typically even more expensive in developing countries than they are in the States.

    • oldog
    • 3 years ago

    Time to raise the cash dividend to shareholders.

    • ludi
    • 3 years ago

    “Good news! We sold the entire world an iPhone and an iPad!”
    “That’s great! What else?”
    “People are raving about the quality and durability of our products and support!”
    “Also great! What else?”
    “They’re…not buying replacements so much.”
    “Uhm…”

    • JosiahBradley
    • 3 years ago

    It takes courage to post these financial results.

      • Srsly_Bro
      • 3 years ago

      more courage to make that post…

        • sweatshopking
        • 3 years ago

        I minused you because we haven’t spoken in a year.

    • tacitust
    • 3 years ago

    So, signs of a maturing market, yet still an insanely profitable one.

      • w76
      • 3 years ago

      Believe it or not, those margins aren’t anything amazing, and they’re shrinking. What makes Apple stand out is its huge size, and the fact they don’t seem to know what to do with their income. Normal companies either invest it or pay it out to owners so that the owners can redeploy it elsewhere, but Apple just sits on its cash hoard. (Some of that problem I guess is that a lot of it is overseas, with big tax penalties bringing it back to the US as part of a dividend payment)

      Eh, okay, they’re secretly investing a small portion of their mountain of money in some electric car project — allegedly. But apparently not enough to keep the mountain from growing.

        • sweatshopking
        • 3 years ago

        electric car project, codename titan, has been basically shutdown.

          • tipoo
          • 3 years ago

          Sounds like it was scaled back to mostly a software project (I guess like Google, “we don’t want to build the car, we want to build the driver”), with a late 2017 deadline for the teams to show a viable car project.

            • sweatshopking
            • 3 years ago

            Right. so the electric car project is dead. now they’re just another company working on driverless ai.

        • derFunkenstein
        • 3 years ago

        iPhone SE probably has a lot to do with lower margins. 6S hardware minus 3D touch for $400 is pretty nice.

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