Apple's two biggest moneymakers, the iPhone and iPad, are down year-over-year. (credit: Andrew Cunningham)
Apple has just released its earnings report for the second quarter of fiscal 2016, which runs from the beginning of January to the end of March. As CEO Tim Cook and CFO Luca Maestri warned in last quarter's earnings call, iPhone sales were down year-over-year for the first time since the product's launch in 2007. Since the iPhone accounts for around two-thirds of Apple's revenue, this means that Apple is also reporting its first year-over-year quarterly revenue decline since 2003, something CEO Tim Cook referred to as a "pause in [Apple's] growth." iPad and Mac sales are also down, though the Services and "Other products" categories ticked upward.
Apple made $10.5 billion in profit and $58 billion in revenue, compared to $13.6 billion in profit and $58 billion in revenue in Q1 of 2015. Its gross margin was 39.4 percent. These results beat the low end of Apple's guidance for the quarter, which predicted revenue between $50 billion and $53 billion and a profit margin between 39 and 40 percent.
The company predicts that the year-over-year quarterly decline will continue next year—Apple expects it will make between $41 and $43 billion in revenue in the third quarter of fiscal 2016 with profit margins between 37.5 and 38 percent. This is well below the $49.6 billion in revenue that Apple made in Q3 of 2015.
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