Apple reported a surprise fall in iPhone sales for the second quarter on Tuesday, suggesting that customers had delayed purchases in anticipation of the 1oth-anniversary edition launch of the company’s core product.
The company shipped 50.8m iPhones in the quarter ended 1 April, down from 51.2m shipped in the second quarter of 2016. Analysts on average had estimated iPhone sales of 52.27m, according to financial data and analytics firm FactSet. This means that the iPhone’s return to growth following the launch of the iPhone 7 only lasted the so-called holiday quarter at the end of 2016.
The company reported a 4.6% revenue rise to $52.9bn, but this was shy of the $53.02bn estimate – leading to stock dropping by about 1.5% in after hours trading.
The company reported higher-than-expected profits resulting in earnings per share of $2.10 – higher than the Wall Street expectation of $2.02 earnings per share.
“This is a very mixed report for Apple in terms of results. Apple sold less iPhones than it did a year ago, but the possibility of consumers holding out until the new iPhone release is very real, especially when the upgrade is rumored to be more meaningful than in previous years,” said Clement Thibault, Senior Analyst at Investing.com.
iPad sales were 8.9m units, another year-on-year decline, although Mac sales rose from 4m a year ago to 4.2 million with sales price increases meaning revenue grew by 14%.
Apple typically launches its new iPhones in September. A big jump in sales usually follows in the holiday quarter, before demand tapers over the next few quarters as customers hold back ahead of the next launch.
Apple’s 10th-anniversary iPhone range might sport features such as wireless charging, 3D facial recognition and a curved display.
The company forecast total revenue of between $43.5bn and $45.5bn for the current quarter, while analysts on average were expecting $45.6bn, according to Thomson Reuters I/B/E/S.
Analysts on average expect the company to sell 42.31m iPhones in the current quarter, according to FactSet.
Earlier in the day, Apple’s market capitalization briefly topped its peak market value of $774.91bn to reach $776.59bn. It remains the only US-listed stock with a market value of more than $700bn.
“We’re not disappointed but our expectations were low to begin with,” said Thibault. “We would have liked to have seen stronger renewed growth, but after spoiling us for the past few years, it doesn’t come as easy for Apple as it used to.”