The results of Apple’s Q2 2016 are not as expected. These results also reflect the poor show from other U.S tech giants like Microsoft, Google and Alphabet. This poor result in the revenue of Apple has been experienced for the first time after 2003. The sale of iPhones has also reduced significantly compared to Apple’s Q2 2015. The revenue for Q2 2016 is $50.56 billion which is 33% lower than Q1 2016 and 13% lower Q2 2015. Apple traces macroeconomic problems and the strong sales of the previous quarter as the reasons for the depreciation of sales. The investors of Apple have stated that the company has reached a minimal saturation point with the existing products. Unless it produces new and innovative products, Apple cannot witness a significant growth. In China, Apple is facing heavy competition from Huawei, Lenovo and LeEco. The company’s revenue in China is decreased from $18.37 billion in Q1 2016 to $12.5 billion in Q2 2016.
In Q2 2016, the reveue from Apple services like Apple Music and App Store is more than the revenue generated from its products like Mac and iPad. The sale of Apple Watch, Apple TV, Beats products, Apple iPod and other miscellaneous products has reduced by 50% in Q2 2016 compared to Q1 2016. Apple had sold 36% lesser iPads in the Q2 2016 when compared to the Q1 2016. Although the revenue from hardware has diminished, the revenue from services has seen a significant growth of 20% in Q2 2016 compared to Q1 2015.
Jia Yueting, CEO of LeEco has said in an interview with CNBC that Apple is losing its pace in China as the innovation has slowed done. In India, Apple has increased the price of iPhones after the poor sales of iPhone SE.
Apple has also estimated the revenue of Q3 2016 to be between $41 billion and $43 billion which is much less than the revenue for Q2 2016. But Tim Cook, the CEO of Apple has claimed that people can expect new innovations from the upcoming Apple products. Apple iPhone 7 is anticipated to have some innovative features like skipping the 3.5mm audio port.