Apple Reports First Revenue Drop in Years as iPhone Sales Slide 15 Percent
Apple logs a 5 percent year-over-year revenue decline as its flagship iPhone business shrinks significantly. Meanwhile, the tech giant's services and wearables divisions show strong growth to offset the hardware losses.
Apple reports a 5 percent year-over-year revenue decline to $84.3 billion for the first quarter of 2019, matching its recently lowered expectations. The tech giant sees its flagship iPhone revenue drop 15 percent to $52 billion, prompting CEO Tim Cook to emphasize the company's long-term focus despite missing initial revenue guidance. Apple shares rise 2 percent in after-hours trading as Wall Street reacts to the earnings aligning with reduced forecasts.
The company experiences a dramatic 27 percent revenue plunge in Greater China, bringing in just $13.2 billion compared to the previous year. This marks the first quarter that Apple chooses not to disclose exact unit sales for its iPhones, iPads, and Macs. Additionally, Apple sets a cautious Q2 revenue guidance between $55 billion and $59 billion, which sits at the lower end of analyst expectations.
To counter the iPhone struggles, Apple highlights massive growth in its other divisions with Services revenue jumping 19 percent and the Wearables, Home and Accessories category surging 33 percent. The Services division boasts an impressive 62.8 percent gross margin, underscoring Apple's successful push toward recurring software revenue. Furthermore, Apple reveals that its worldwide active device install base grows to 1.4 billion, proving that customer retention remains incredibly strong.