comscore Apple Q2, 2016 earnings: Apple sees first revenue decline in 13 years; but iPhone sales grow 56% in India

Apple Q2, 2016 earnings: Apple sees first revenue decline in 13 years; but iPhone sales grow 56% in India

Despite recording the first revenue decline since 2003, Apple had some positive news about its growth in India.


Apple’s iPhone sales have continued to decline and after a disappointing first quarter, the news is not that great in the second quarter either. For the first time in over 13 years, the Cupertino-based giant recorded a dip in its revenues, and its iPhone sales were down as well. But not everything is as grim as it seems, and in fact the company had some positive news to share where India was concerned. Apple recorded a 56 percent rise in iPhone sales in India, prompting CEO Tim Cook to compare it with China, Apple’s biggest market outside the US. “India is where China was maybe seven to ten years ago,” Cook said during the earnings call. Also Read - Apple MacBook Pro users report different issues with the SD card reader

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Apple’s revenues in the second quarter stood at $50.6 billion, which marks a 13 percent decline from the same quarter last year, and 33 percent from last quarter. Net income for the last quarter also went down from $13.6 billion to 10.5 billion. Also Read - iPad Pro, iPad Air 5, iPad 10 features revealed, may debut in 2022

The company managed to sell 51.1 million iPhones in this quarter, which is down 18 percent from last year in the same period. It also managed to sell 10.25 million iPads and 4 million Macs, which mark a 19 percent decline and nine percent decline from the previous year respectively.

This is the third consecutive quarter where Apple hasn’t mentioned Apple Watch numbers, and instead reported them under the ‘Other Products’ category. It is difficult to gauge just how well the wearable is doing, but considering Apple has yet to reveal individual numbers, the news may not be all that good.

But the news in Indian market was quite positive, and Apple actually managed to record over 50 percent rise in iPhone sales in the country. CEO Tim Cook was not just pleased with the growth in India, but also reiterated the country’s role for Apple’s growth. “If you take a look at India, we grew by 56 percent, and we’re placing increasing emphasis in these areas, where it’s clear there will be disproportionate growth versus the more developed areas,” Cook was said during the earnings call.

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Cook talked out how Apple has increased its focus on the Indian market, and how the efforts are slowly bearing fruit. “We’ve been working in India now for a couple of years or more, but we’ve been working with great energy over the last 18 months or so, and I’m encouraged by the results that we’re beginning to see there, and believe there’s a lot, lot more there,” Cook said. He even went on to compare India with China saying, “I view India as where China was maybe seven to ten years ago from that point of view, and I think there’s a really great opportunity there.”

Apple has recently been lobbying hard in India as it is seeking permission to open Apple Stores in India. It recently gave a presentation to a DIPP-led panel, and reports claim that the company is close to getting permission to open stores in India without the 30 percent domestic local sourcing norms. It is also setting up a Rs 150 crore technology development center in Hyderabad.

Despite the positive outlook about the Indian market, Cook did touch upon some of the obstacles that the company is facing, including slow LTE network rollout and retail.

“If you look at India, and each country has a different story a bit, but the things that have held not only us back perhaps but some others as well is that the LTE rollout with India just really began this year, and so we’ll begin to see some really good networks coming on in India,” Cook said. “That will unleash the power and capability of the iPhone in a way that an older network, a 2.5G or even some 3G networks, would not do. And so the infrastructure is one key.”

About retail, Cook talked about plans to ‘building the channel out’. “Unlike the US, as an example, where the carriers in the U.S. sell the vast majority of phones that are sold in the United States, in India the carriers in general sell virtually no phones. And so it’s out in retail, and retail is many, many different small shops.”

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  • Published Date: April 27, 2016 9:51 AM IST
  • Updated Date: April 27, 2016 9:57 AM IST

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