“Fifteen years ago this week, Apple launched the iPod, unleashing a wave of disruption over the music industry and reviving the fortunes of what was then a struggling computer company,” Tim Bradshaw reports for The Financial Times. “Thanks in part to the growth spurred by the iPod, Apple has never since posted a decline in annual revenues — until this week, when it revealed an 8 per cent drop in sales for 2016.”
“Now, the company is looking towards another digital-media revolution to galvanise its business,” Bradshaw reports. “With sales of its iPhone, iPad, Macs and even the Apple Watch in decline during its fiscal fourth quarter, Apple sought to focus investors’ attention on the one bright spot in Tuesday’s earnings report: its services business.”
“Revenues from online services such as the App Store, iCloud and Apple Music rose 24 per cent to a record $6.3bn, making it the company’s second largest source of income after the iPhone,” Bradshaw reports. “Luca Maestri, Apple’s finance chief, called services the ‘highlight of the quarter.’ ‘Momentum is very good,’” he said in an interview. Mr Maestri repeated a prediction first made earlier this year that, if it were a standalone entity, Apple’s services unit would be a large enough business to reach the Fortune 100 rankings of the top US companies by next year. Already, its most recent quarterly sales outstripped Facebook’s second-quarter advertising revenues of $6.2bn.”
Read more in the full article here.
MacDailyNews Take: Again, the tough compare created by Apple being years late to market with a properly-sized iPhone is now blessedly OVER.
Apple has now forecast a return to growth.
Apple’s fiscal 2016 revenue from Services alone ($24.348 billion) would stand at #155 on the Fortune 500 list of the largest U.S. corporations by total revenue, ahead of the likes of Duke Energy, Time Warner Cable, and Halliburton.
Apple’s sales and profit fell for the first time since 2001 – October 25, 2016