Apple has suffered its first annual drop in profits for 15 years, after sales of the iPhone continued to slide in the three months from July to September.
iPhone sales fell by 5% compared with the same period in 2015, with Apple selling 45.5 million handsets. However, that marked an increase on the second quarter of this year, with sales up by 13%.
That rise is likely due to the launch of the iPhone 7 in late September. The summer months are traditionally slow for Apple as consumers hold out for new devices.
However, the annual slide in profits of 8% will make for worrying news in Cupertino, despite CEO Tim Cook bullishly describing the the results as ‘strong’.
Overall they point to a wider picture of Apple saturation, where everyone who wants an Apple device already has one. iPhone 7 opening weekend sales were not reported, suggesting Apple knows that it cannot maintain the huge growth it enjoyed in late 2014.
There were other worrying signs too: sales in China dipped, leading to a 30% fall in revenue there; the iPad continues to struggle in the face of larger smartphones, with a 6% years–on–year fall; and Apple’s ‘other products’ category, which includes its Apple Watch, saw sales dip by 22%.
Apple is expected to completely redesign the iPhone in 2017 to mark its tenth anniversary. That means that sales should enjoy a boost by the end of next year.