NEW YORK – Apple shares were sent reeling yesterday on word of a steep drop in sales of iPhones, which are at the heart of the tech titan’s money-making engine.
Profits fell 7% to US$12.7 billion (RM52.79 billion) in the recently ended quarter, said the Silicon Valley-based colossus in its earnings release.
The company’s total revenue edged up from last year’s level to US$64.7 billion in the fiscal fourth quarter, but revenue from iPhone sales – the major income driver for Apple – slid some 20% from a year ago, unsettling investors.
Apple’s share price nosedived more than 4% in after-hours trading.
“The iPhone is the cash cow and driver of pretty much every add-on service Apple has out there,” said analyst Patrick Moorhead of Moor Insights and Strategy.
“Everything is tied to that.”
Apple has made a priority of selling apps, games, subscriptions and music to iPhone users in recent years to break its dependence on handset sales.
From Apple TV and the App Store to Apple Watch and AirPod ear buds, the company’s other offerings are aimed at iPhone users, he said.
“I expect Apple in the next quarter to have a nice big surge due to the new models, and also the financing for new phones with monthly plans.”
Freshly launched iPhone 12 models include some tailored to ultra-fast 5G networks.
“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” said chief executive Tim Cook in a statement.
He added that early response to the firm’s first 5G-enabled iPhone line-up has been “tremendously positive”. – AFP, October 30, 2020
