Apple, iPhone + iPad Sales Fall Shares Go South
iPhone and iPad sales are down and Apple stock has headed south, as investors digest the future for the big US Company that now has $341 billion in the bank.
Apple sold 50.8 million iPhones in the quarter ended April 1, down from 51.2 million units in the same period a year earlier, and less than the 51.4 million predicted by analysts.
Sales in China fell 14 percent as consumers take to locally made devices over the Apple offering. Apple stock slipped more than 1 percent in extended trading, following the release of the results. The shares jumped 27 percent this year in anticipation of an iPhone 8 launch in September. Ayt this stage the device sounds very similar to the iPhone 8.
Apple who has stockpiled US$256.8 billion A$341 in cash said it will return more of that to shareholders, announcing $50 billion in new buybacks and a 63-cent dividend. Analysts had forecast 62 cents, up from the 57 cents paid in its 2016 fiscal year. The company had already announced $175 billion in repurchases, helping maintain the stock price in lulls between new products.
Much is riding on the success of the iPhone 8. Smartphone sales growth has been slowing and Apple has lost market share in China, a major source of growth before last year, amid increased competition from local rivals.
“Chinese vendors such as Huawei, Oppo and Vivo continue to make life really hard for Apple in the region,” John Butler, a Bloomberg Intelligence analyst, said.
Apple benefited from Samsung’s recall of its Galaxy S7 smartphone last year, but the South Korean company followed up with the introduction of the well-reviewed Galaxy S8 in April. If S8 sales are strong, that may mean fewer new customers for the new iPhone and the services businesses that feed of the device say analysts.
Apple’s offshore cash reserves climbed to $240 billion at the start of April, according to the CFO. Cook’s plans for that money have come under increasing focus after President Donald Trump proposed slashing the corporate tax rate on repatriated funds.
The Mac was a bright spot for Apple in the quarter, as sales of the company’s new MacBook propelled a 14% increase in revenue to $5.84 billion.
The iPad, however, the company’s third-largest product by sales, recorded another decline in unit shipments, extending its long downturn. Shipments declined 13% to 8.9 million units despite Apple spending an estimated $28.7 million on a TV advertising campaign during the quarter, according to advertising analysis by iSpot.tv.