BREAKING NEWS: iPhone Sales Slump 17%, Apple Profits Tumble 16%

Apple’s core iPhone business has tanked with sales slumping 17% in the quarter.

In Australia carriers and retailers have told ChannelNews that the sales fall was over 20% with some retail outlets.

This morning the US Company reported that sales have fallen to US$31 billion, immediately the shares slumped nearly 2%, iPhone sales represent 62% of all Apple sales.

Apple said profit for the three months through March 30 tumbled 16% to $11.56 billion, while revenue slid 5% to $58.02 billion.

Despite the slump Apple’s stock was up about 27% this year, recouping most of the losses it racked up in the final two months of last year.

Saving the Company from further revenue slumps was services like app sales and streaming-music subscriptions, which collectively jumped 16%. In March, Apple announced new subscription services for original TV shows, videogames and magazines, as well as a credit card.

The iPhone’s woes threaten to define one of the worst years in Chief Executive Tim Cook’s tenure claimed the Wall Street Journal.

In January, Apple reported its first decline in revenue and profit for a peak period quarter.

It last experienced back-to-back quarterly declines in 2016—a year when the iPhone 6s struggled with weak demand because it offered limited improvements over preceding models much like this year’s iPhone XS and XR.

“What we liked was during the last few weeks of the quarter we had our best performance, across the company and in China as well,” Luca Maestri, Apple’s finance chief, said in an interview. “We are coming into the June quarter with a good level of confidence.” Aligned with that, the company said it expects revenue in the current quarter of between $52.5 billion and $54.5 billion, above consensus expectations.

With analysts claiming that Apple will struggle to grow iPhone sales the Company now has to generate billions of dollars in new revenue by pushing subscription offerings across the more than 900 million iPhones world-wide. The only problem is that the more iPhone sales fall and their traditional base moves to new models from Samsung and Huawei the more the Company has to rely on none iPhone users to access their content offerings.

Earlier this month investors were relieved after Apple struck a multiyear agreement in April with Qualcomm for smartphone modem chips that should allow Apple to deliver an iPhone in 2020 with 5G wireless technology.

“They have reset expectations,” said Mike Bailey, research director at FBB Capital Partners LLC, which has $1.1 billion under management and counts Apple among its top-10 holdings. “The next catalyst Apple needs to get sales growing are features like 5G. That factor went from negative to positive in the quarter because of the resolution with Qualcomm.”