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Apple Q2 earnings expectations: 51 million iPhones, $52 billion revenue, first quarterly decline since 2003

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Later today, at about 4.30 PM ET, Apple will announce its financial earnings results for fiscal Q2, including the latest three-month sales numbers for iPhone, iPad and Mac.

Although Apple is still going to post profits in the billions, still one of the most successful companies the world by all metrics, investor expectations are low as the company guidance indicates it will report its first decline in year-over-year quarterly revenue since 2003. The primary cause? Falling iPhone sales …

Using data compiled by Philip Elmer-Dewitt (subscription required to see full article), analysts are expecting negative growth numbers across the board. In the same quarter of 2015, Apple reported $58 billion in revenue and $13.6 billion net profit derived from sales of 61.1 million iPhones, 12 million iPads and 4.5 million Macs.

Every single number on this sheet is expected to fall significantly in the Q2 2016 quarter aside from Macs. Elmer-Dewitt’s data suggests consensus of $52.2 billion revenue (a 10% decline), 51 million iPhones (a 15% decline), 9.9 million iPads (a 20% decline) with Mac sales constant at 4.5 million.

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The revenue decline is particularly notable, as it’s the first time company revenue will decline YOY since 2003. Until now, booming sales of iPhones and iOS devices has pushed Apple’s revenue numbers to record levels every single year.

Apple Watch is new to the quarter, so there isn’t a year-over-year comparison. The data sheet indicates sales around the 3 million mark. However, this number is not verifiable as Apple does not disclose Apple Watch units revenue, bundling revenue contributions into an ‘Other Products’ category.

Following the press release of results, Apple will hold an investor earnings call at 5 PM ET to discuss the numbers and host a Q&A session with select investors. 9to5Mac will have full coverage of the call as it happens.

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Comments

  1. mrdanielfeo - 8 years ago

    Do you think there will be any Apple Pay announcements?

  2. presslee - 8 years ago

    They could lose hundreds of billions dollars and still be rich enough to build 54 more iCloud centers and a campus 3. :P

  3. Robert - 8 years ago

    In perspective
    They still make far more money than Google, Intel, Microsoft and Facebook put together!

    The one number that I think will steal the show today is the outlook. The loss of growth in Jan-Mar will be wiped out by a gain in growth Apr-Jun. (The iPhone SE launch may have been soft by iPhone standards but it will make several times more money than the Apple Watch did in the same period last year.)

    The growth gain in year on year terms should be impressive. Apple may have up to negative 10% growth in Q2 but hopefully outlook of solid 20% growth in Q3.

  4. giuseppe9000 - 8 years ago

    once again, awesome results, for the shareholders

    but the iphone wow factor has vanished

    • applegetridofsimandjack - 8 years ago

      Maybe Apple should stop raising the price of the iPhone every year, in Europe. And maybe they should stop selling the 16GB model which only allows you to store 3 photos.

      • giuseppe9000 - 8 years ago

        italiano

      • Charlypollo - 8 years ago

        Is Apple the one raising the prices? In my country, the exchange rate is the one killing the iphone. The current prices are beyond any logic. I could buy an entire living room with TV, console, furniture, home theather, etc. for the price of the 128gb phone. I’m sorry but this phone isn’t worth the price anymore.

        In previous years I could see a lot of people carrying the latest models. Now, I barely see 6/6s in the field. Even people with high income and no money problems (like my boss) still carry a 5s, saying that a $1000+ phone is absolutely stupid.

      • chris9771 - 8 years ago

        Personally, I am happy with the 16GB, and has been discussed many times in the comments section on this site, millions of other users are, too. To each their own and let it be. There really is no point for people to complain about a 16gb phone if they wouldn’t purchase one anyway. Even if 32GB was the min offered by apple, I’d bet the majority of people saying a 16gb phone is a sin would jump over the 32 and purchase a 64 or 128 Gb.
        I’ve read a number of your comments (your username stands out!), especially this past week or so, you always have very insightful commentary to add. But on this 16gb issue, if it’s not relevant for your use case, then why say anything? and, I’ve had way more than 3 photos on my phone, too ;-)

  5. André Hedegaard - 8 years ago

    Oh well, we knew this would happen, since Steve Job’s passing, Apple has lost its “flair”. We’ve seen it since with their product lineup. The only new item to come along was the Watch which is in all honesty not as popular as many would’ve hoped.
    Even Tim Cook isn’t particularly interested in design or anything, perhaps thats a good thing. Can’t really tell.

    • Kevin Miller - 8 years ago

      The Watch seems to be doing fine, sales-wise. Its limitations are obvious, but in that way, it reminds me of a little something called the iPod.

      • André Hedegaard - 8 years ago

        Fine saleswise? How do you calculate that? Compared to what exactly? My point being that even selling 10.000 units could be considered “good” or considered “bad” depending.
        Comparing the Watch to an iPod isn’t the same thing really. As they’re both in diffrent market segments.

      • ninjadude99 - 8 years ago

        @André Hedegaard

        Nearly every first generation Apple product is like this. I think this is what Kevin is basically saying (in regards to his last statement). Apple has never gotten things right the first time, but after a while, it becomes a blowout success. I could align the success of the Apple Watch to the first gen MacBook Air, Retina MacBook, iPhone, and iPad. People have complained about all of the those first-gem products (for the MBA and rMB, it’s the price, ports, design, etc.; for iPhone, it’s the lack of 3G, only available in one carrier, etc., for the iPad, people called it a toy, etc.,…), but eventually Apple fixed those issues. Apart from the price, I don’t clearly remember what people’s complaints were for the first-gn iPod (and there were a bunch of them), but Apple eventually rectified them. And in all cases, they were fine sales wise.

        The Apple Watch will experience the same ride (and it is). Otherwise, the interesting rise of the “Other products” category will just unexplained because according to you, it’s obviously not the Apple Watch sales…

      • André Hedegaard - 8 years ago

        Thanks ninjadude99 for your constructive viewpoints.
        I understand what you’re saying abotu 1st gen products, however, when Apple made the 1st gen iPod, they didnt have any experience with the “i” range of products. Now many years later, with many of the same people (namely Jony Ive, Craig, Scott Forstall et al) have gained experience with iMacs, iPads, iPhones, so why can’t they draw on that experience to make a fantastic watch? As it is, its a a “good” product, but not “fantastic” or any kind of mind altering device.
        But I suppose you’re right, there’ll always be people complaining about this, that (me included) when some things are bleedingly obvious.

        Take the iPhone SE for example – did it really take 20 people to sit in a room and then come up with a brand new design and just use a rehash of the iPhone 5S? Really? They couldn’t have made anything newer than an old design already used? I find that unpalatable and shows that Apple is focused unfortunately on profit margins.
        Another thing is the amount of RAM (which is relatively cheap in todays world) yet to only include 16GB versions so that you’d have to pay a far greater amount to get the 64GB version. Honestly!

    • chris9771 - 8 years ago

      Not as popular? Many trustworthy articles claim otherwise, in terms of sales figures being estimated at 2x’s the original iphone. http://www.wsj.com/articles/apple-watch-with-sizable-sales-cant-shake-its-critics-1461524901.

      As @ninjadude says, Its a 1st gen, it will get better with additional iterations of the items. Its a new market segment, for them, not just a larger iphone, aka Ipad, but a completely new market that Apple will improve their devices for as they learn more about the smartwatch market

      • André Hedegaard - 8 years ago

        As I said previously, sales of Watch can’t be compared to a phone – where most people need a communications device, not everyone needs a watch.

        Lots areas in which Apple can do better:
        – Better battery life
        – More durable iPhones
        – Innovation in sound quality, especially since they bought Beats for a rip-off sum
        – Customizable colours and bezels – e.g. option to choose gold frame and black bezel on iPad, instead of always hideous white
        – Raise the min. GB from 16 to 64, but keep price the same because RAM prices are dirt cheap. This is just marketing by Apple to maximise profit margins.

        Like Steve Jobs said many times – get rid of products that dont add value/sales – so get rid of the base macbook with only 1 usb port.

      • chris9771 - 8 years ago

        But, if “most people need a communication device” wouldn;t the first year sales show the original phone sold more than the watch; which did not happen. I agree the watch is a niche item and I do not own one, but the numbers speak for themselves – the watch sold in greater numbers than the phone in the first year of each.

  6. PhilBoogie - 8 years ago

    “There has never been a statue erected to honour an analyst.”

  7. rogifan - 8 years ago

    So Apple hasn’t released results yet but everyone is already digging their grave? Smartphones have matured. Every company is releasing incremental improvements like a better camera or water resistance. It’s impossible to have revolutions every single year. What does the Galaxy 7 have over the 6 that wouldn’t be considered just an incremental improvement?

  8. jerenyun - 8 years ago

    While we’re all focusing on iOS device sales numbers, look at what is projected to increase: “Services” and “Other”. I think the Services category is the most interesting. Now that we’re looking at iOS device sales potentially slowing due to market saturation, Apple needs to provide good services to make all of their hardware worth owning. I totally expect to see the Services category to be given a bit of a lengthy mention on the call today, as well as to see that category continuing to grow for the next few quarters, especially after WWDC, where they’d have a perfect opportunity to introduce more iCloud features or stability enhancements to entice more people to their cloud.

  9. Nate See - 8 years ago

    Is that a picture of Tim Cook using a Surface Pro?! :(

  10. Andrew Craft - 8 years ago

    Tim Cook is using the improper power plug for his iMac… Apple Care ain’t going to cover it! ahahah

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Avatar for Benjamin Mayo Benjamin Mayo

Benjamin develops iOS apps professionally and covers Apple news and rumors for 9to5Mac. Listen to Benjamin, every week, on the Happy Hour podcast. Check out his personal blog. Message Benjamin over email or Twitter.