Apple, Tuesday, reported quarterly sales of $50.6 billion down from $58 billion last year as iPhone sales drop. The 13 percent drop in revenue is the company’s the first drop since 2003.
With international sales accounting for 67 percent of the quarter’s revenue, a stronger dollar also contributed to fall in revenue. In China alone, sales fell 26 percent.
“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Tim Cook, Apple’s CEO. “We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”
Following the announcement, Apple shares fell by 8 percent at a point. The company has historically been one of the strongest and most consistent growth stocks in the world, its poor performance therefore raises alarm. Apple’s engine growth has been the iPhone but it has not been selling as much as it used to, and this may continue. Apple has to find new lines of business to ensure continued growth.
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The company knows this, hence the release of new devices like the iPad Pro and the iPhone SE. It is also expanding its services with Apple Music, among other things. All these can generate new lines of revenue for the company if they grow like iPhone did. There is great potential, as Apple Music has shown. According to the technology company, the service now has 13 million paying subscribers and revenue hit $6 billion this quarter.
Apple announced that its Board of Directors has authorized an increase of $50 billion to the Company’s program to return capital to shareholders. Under the expanded program, Apple plans to spend a cumulative total of $250 billion of cash by the end of March 2018.
The Board has also approved an increase of 10 percent to the Company’s quarterly dividend, and has declared a dividend of $.57 per share, payable on May 12, 2016 to shareholders of record as of the close of business on May 9, 2016.