Apple reported its steepest quarterly drop in iPhone sales in two years for the third quarter of the current year as its iPhone customers put off purchasing the new iPhones devices because of the late launch of new 5G phones by the company.
This also resulted in a wipe out of $100 billion from its stock market value as its shares sunk by over 5 per cent at one point in after-hours trading.
New iPhones have been launched by Apple every year without fail in the month of September since 2013. But that launch was pushed back by a back by a month due to the novel coronavirus pandemic and some of its devices are still being shipped.
Even though the company beat market and analysts’ expectations for the third quarter for revenue and profits on the overall because of resurgence in sales of its Macs and AirPods, there was a 20.7 per cent drop in the sale of iPhones during the quarter at $26.4 billion.
While it as expected that the Cupertino, California based company would report lower sales of its iPhones due to the pandemic, but investors and analysts had not expected that the drop would be to the extent as it was – particularly in China where access to 5G is available to more consumers than in the United States or Europe.
So far this year, sales expectations have mostly been beaten by Apple while also releasing a slew of new products and services that have been embraced by its customers while they were mostly confined to their homes because of restrictions imposed due to the pandemic.
Apple reported revenues and profit of $64.7 billion and 73 cents per share for its fiscal fourth quarter ended on September 26 while analysts had forecast them at $63.7 billion and 70 cents per share respectively, according to data from IBES from Refinitiv.
Further, only the fourth quarter results will include opening-weekend iPhone sales, hich are always important for Apple, as the announcement by the company for its flagship iPhone 12 was delayed until October 13 which was several weeks later than usual.
Based on the first five days of shipping data, he was “optimistic” about the iPhone 12 cycle, said Apple Chief Executive Tim Cook in an interview with Reuters.
“5G is a once-in-a-decade kind of opportunity. And we could not be more excited to hit the market exactly when we did,” Cook said. “At least in the U.S., the carriers are being very aggressive.”
There as a drop of 28 per cent in the sale of the new iPhone 12 because of the delay in its release in Greater China, that came in at to $7.95 billion. He expects the new 5G devices to help iPhone sales recover in China, Cook said.
“What we’re seeing in the early going in the first five days gives us a lot of confidence that China will return to growth in our fiscal Q1,” Cook said.
(Adapted from NDTV.com)