Published: Thu, October 27, 2016
Tech | By Dwayne Harmon

IPhone Sales Continues to Drop, Apple Earning Billions Still

In its latest report, Apple's fiscal year 2016 revenue has declined nearly 8% from US$233.7 billion to US$215.6 billion. The growth in services was not strong enough to offset the decline in product shipments though, and Apple's quarterly revenue fell to $46.85 billion from $51.5 billion previous year.

In anticipation of high iPhone 7 sales, the company expects 1QFY17 revenue in $76-78 billion range, versus Street estimate of $74.98 billion.

Apple has been looking to new countries such as China to drive growth but revenues in the world's second-largest economy fell 30 percent year-on-year in the fiscal fourth quarter, according to the company's results.

However, investors were also rattled when Apple said it was caught off guard by how many people wanted to buy its biggest smartphone, the iPhone 7 Plus, and the miscalculation may hit profits this holiday season. Yet the firm posted $46.90 billion in revenue, vs. projections of $46.94 billion. This was the third continuous dip in the quarterly sales of Apple.

In after-hour trading, Apple shares were down 2.8 per cent.

The iPhone maker generated operating cash flow of $16.1 billion, setting a new record for the quarter. (AAPL) shares closed up 0.51% at $118.25.

This year-on-year slump is largely due to an enduring dip in sales of iPhones. He also highlighted growth of Apple's Services business.

Apple forecast revenue of between $US76 billion ($A99 billion) and $US78 billion for the current quarter.

Apple Chief Executive Tim Cook said on a conference call on Tuesday that iPhone 7 will get into supply/demand equilibrium during the quarter, but iPhone 7 Plus may not.

Despite these year-over-year declines, Apple's Services segment-which includes software and services like Apple Music, Apple Pay, and iCloud-was a bright spot in its earnings results, bringing in $6.3 billion in revenue, up 24%. Also, one direct competitor, Samsung's galaxy note seven, is going through a massive recall.

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