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Apple tree's results for the 2nd quarter of fiscal twelvemonth 2016 are but in, and the company'due south reign equally a near-invincible titan of Wall Street is, in the words of Nathan Fillion, "certainly coming to a middle." On the one mitt, the company only posted its first yr-on-twelvemonth quarterly pass up in thirteen years (meaning Q2 2016 sales were lower than Q2 2015 sales). On the other, Apple withal had the kind of quarter that most companies would kill for, with $l.vi billion in sales and $10.5 billion cyberspace revenue.

Nevertheless, that'due south an $8 billion decline over the aforementioned period last year, and the declines hit across most Apple segments. iPhone sales declined 18.42%, iPad's fell 18.7%, and Macintosh sales declined 9%. "Services" increased by 20% (that'southward Apple Music and iTunes), while "Other Products" increased from $ane.59 billion to $2.nineteen billion. Apple notwithstanding isn't telling anyone how many Apple Watches information technology has sold, but the company did note that most of the increment in "Other" was Apple tree Watch acquirement.

Breaking out the declines

The declines in Apple's cadre businesses reflect three dissimilar trends and have to be broken out separately. The easiest to explain is the steep drop in iPhone sales. The iPhone 6 and 6 Plus triggered a bully deal of pent-upwardly demand in the Apple tree earth for larger-screen devices, and sales of these units were extremely loftier every bit a result.

Most of that high sales volume occurred in Q1 2015, every bit the nautical chart shows, but Q2 2015 was still far above Apple'south historical norm for the iPhone. iPhone sales grew 20% in 2013 over 2012, 12% in 2014 compared with 2013, and 37% in 2015 compared with 2014. 2016's figures, in other words, are less a decline than a return to previous trends.

The iPad decline, on the other paw, is much more of a trend. iPad sales peaked in Q1 2014 and have continued to decline since then, despite a number of refreshes and product launches, including the iPad Pro. The continued turn down in iPad shipments suggest that tablet sales were not particularly rejuvenated by Apple's recent hardware launches.

Finally, there'due south the decline in Mac shipments. It's hard to parse much from this — on the i hand, most of Apple's products are at to the lowest degree a year former, and some, like the Mac Pro, are three years sometime. With 14nm GPU hardware right around the corner, Apple will probably launch some significant product refreshes in the next 12 months. On the other hand, the Mac marketplace probably isn't immune to the same contractions that have indomitable the PC industry for several years at present. The speed at which people supersede hardware isn't probable to be a Mac-versus-PC effect. And you could argue new Macs, including the but-released 2016 Macbook, are decidedly evolutionary, not revolutionary these days.

The iPad tablet sales information is interesting considering it suggests that tablets may be falling prey to the aforementioned forces that have dragged down PC sales for about five years. If most customers are making do with tablets that are two-three years old, so how long before that same trend impacts smartphones — and what will the bear on be on handset manufacturers and technology companies that at present depend on shipments in these markets to prop up margins and provide revenue?

Come what may, Apple remains the best-positioned of any of the tech companies to ride out that doubtfulness. But the stark gap between Apple tree's "Other" category revenue and everything else is a reminder that for all the hype, the "wearables" revolution has yet to arrive — and nobody, including Apple tree, has figured out how to build wearable devices that consumers want to wear.