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Apple’s Q1 earnings are in, and things don’t look too rosy the iPhone. Revenue for the handset has declined 15 percent year over year for the quarter. It’s a pretty hefty drop for device that’s been flying high for so long, but you can’t say Apple didn’t warn us. Earlier this month, Tim Cook noted that the company was lowering its guidance, thanks in no small part to smartphone figures.
In its earlier report, the company put much of the blame at the feet of the Chinese market. There are a lot of factors on that front, including slowing economic growth in the world’s largest smartphone market, and a general trend toward prolonged upgrade cycles, as users are holding onto devices for longer. That’s been a large part of the reason that smartphone sales are down nearly across the board, marking the first contraction of the category since analysts began tracking it.
Last year’s arrival of the XS marked a less dramatic refresh than the iPhone X, but Apple also introduced a new budget handset with the XR. That device has reportedly been a disappointment, though Apple has repeatedly noted that the device has been the best selling iPhone since its October launch.
Notably, those numbers are off-set somewhat by growth in other categories. The iPad grew 17 percent on the strength of new models, while Mac/Wearables and Home/Accessories each grew, at nine and 33 percent, respectively. Services, meanwhile, saw the biggest uptick at 19 percent to $10.9 — an all-time high for the category.
“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” Cook said in a statement. “Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”
