For the first time since 2003, Apple reported a quarterly drop in revenue as sales of the iPhone stumbled.
In the first three months of 2016, Apple sold 51 iPhones, down 16 percent from the 61 million shipped in the first three months of last year. The first time Apple has ever seen iPhone sales decline.
The reason? People aren’t updating their iPhones as regularly as before and some customers just didn’t like the big screens on the iPhone 6. That’s why Apple introduced the smaller iPhone SE in March.
And with the iPhone representing about two thirds of Apple’s business, that’s hitting the bottom line.
Revenue declined 13 percent to $50.6 billion and profit dropped 13 percent to $10.5 billion.
On Wall Street, Apple’s shares fell over 5 percent in after-market trading on the news.
And it wasn’t just the iPhone. Sales of the iPad down 18 percent and Mac computers down 9 percent.
The sales declines were recorded worldwide. The biggest, a 26 percent drop in China, which has seen massive growth in recent quarters.
To be sure, Apple is still a very successful company and the iPhone remains the top smartphone in a very competitive market. But with growth slowing, Tim Cook’s team is facing something they haven’t seen in years.