During the first quarter of 2019 (Apple’s second fiscal quarter), sales of the Apple iPhone decreased by 17 percent compared to the same quarter last year. Since announcing its results for the second fiscal quarter, Apple's share price has also dropped six percent.
The iPhone first quarter results were neither unexpected or the steepest decreases in iPhone revenues the company has faced. Apple reported more dramatic decreases in iPhone revenues during the second and third quarters of 2016 as well as the first quarter of 2018. Earlier this year Apple's CEO Tim Cook also warned investors that he anticipated sales would slow primarily because of the economic deceleration in China. Cook called out China’s 4Q 2018 GDP growth specifically, which was the second lowest of the last 25 years.
While revenue growth from other Apple products and services remains strong, Apple’s net revenue was down five percent to $58 billion in the wake of slowing iPhone sales, highlighting the company’s vulnerability to this revenue stream. The iPhone makes up 54 percent of Apple’s sales value. The company's reliance on the iPhone is, however, gradually shifting toward other products, including the iPad and Apple Watch, and services, such as Apple Music and the recently unveiled TV streaming platform Apple TV+.
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