Apple reports drop in profits & sales for first time in over a decade

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Apple Angela Ahrendts
// Apple has reported a revenue decline of 4.5 per cent over its first quarter
// It blamed the decline on a 15% drop in iPhone sales
// Its finance chief said factors which led to a drop in iPhone sales will continue into the next quarter

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Apple has seen poor iPhone sales drag down both its revenues and profits for the first time in more than a decade.

The tech giant revealed its quarterly results after market close yesterday in the US, posting a 4.5 per cent year-on-year drop in revenues to $84.3 billion (£64.3 billion) for the three months ending December 29.

This comes after a shock revenue warning earlier this month in which the manufacturer and retailer warned revenues would be 10 per cent lower than previous estimates of between $89 billion (£70.7 billion) and $93 billion (£73.9 billion).

Profits also dipped slightly from $20.1 billion (£15.4 billion) in the same period a year earlier to $19.9 billion (£15.3 billion).

As with its profit warning earlier this month, Apple blamed a decline in iPhone sales for the drop in its overall figures, driven by a particular slowdown of sales in China.

Over the quarter it said iPhone sales dropped 15 per cent to $52 billion (£39.7 billion), while Chinese revenues dropped by a whopping 27 per cent.

Despite this, sales across the rest of its business, including services which has a far higher profit margin the hardware sales, jumped 19 per cent.

“We expect the fundamental factors that affected the iPhone’s performance in Q1 will also have an effect in the second quarter,” Apple’s finance chief Luca Maestri told the Financial Times.

In light of this Apple is expecting revenues for the next quarter to come in between $55 billion and $59 billion, a decline of between 3 and 10 per cent on last year.

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