iPhone sales account for a huge chunk of Apple's revenue, so slower iPhone sales means a lot less revenue. (credit: Andrew Cunningham)
Apple will report its earnings for the second quarter of fiscal 2016 at 5pm EDT/2pm PDT, and as usual Senior Technology Editor Lee Hutchinson and I will be following along with the call and providing charts and commentary. Apple is expected to report its first year-over-year revenue decline since 2003, mainly due to lower iPhone sales.
Apple's own forecasts predict revenue between $50 billion and $53 billion, well short of the $58 billion it earned in Q2 of 2015 though still higher than the $45.6 billion in revenue it earned in Q2 of 2014. The outsized success of the iPhone 6 and 6 Plus last year set a tough benchmark for the company, and pent-up demand for the larger phones left over from Q1 of 2015 also made Q2 sales higher than they may otherwise have been. A slowing economy in China, Apple's fastest-growing market, could also affect growth this quarter, while increased pressure from the Chinese government could impact future growth.
Apple introduced a handful of new products in the second quarter, which runs from the beginning of January to the end of March, but they were all introduced late enough in the quarter that we won't know how much of a difference they made until next quarter. New devices include the iPhone SE and 9.7-inch iPad Pro, though price drops for the iPad Air 2 and a new capacity for the 12.9-inch iPad Pro could conceivably shore up the perennially backsliding iPad sales.
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