Summits Yellow

Apple: Revenues, Profits, iPhone Sales Down – but Services Still Rising

Alex Spencer

tim-cook-apple-wwdc-2015.jpgApple has posted its Q4 2016 financial results, and the company's third consecutive drop in revenues and profits.

Revenues stood at $46.9bn (£38.5bn), down nine per cent year-on-year – but up 11 per cent on Q3 2016.

Net profits dropped 19 per cent year-on-year, to $9bn – though, again, these were up on last quarter by 15 per cent.

Revenues took the biggest hit in Greater China. In Q4 2015, China was the second biggest market for Apple with revenues of $12.5bn, but that dropped 30 per cent year-on-year to $8.8bn, with revenues falling behind Europe to third place.

Device sales fell across the board, with the number of iPhones sold down five per cent year-on-year to 45.5m, iPads down six per cent to 9.3m, and the mysterious 'other products' category (which encompasses Apple Watch, iPod and Apple TV, among other devices) down 22 per cent.

With revenues up 24 per cent to $6.3bn, Apple's 'Services' software business proved the one unmitigated success story, something that has been true throughout the company's 2016 results. In its earnings call, Apple highlighted the App Store – up 43 per cent – and Apple Music – helping push its music revenues up 22 per cent – as contributors to this success.

"We remain very confident about the future of our Services business given the unmatched level of engagement, satisfaction and loyalty of our growing installed base," said CEO Tim Cook on the company's earnings call. "We have almost doubled the size of our Services revenue in the last four years, and as we've said before, we expect it to be the size of a Fortune 100 company in fiscal 2017."