A surprise fall in the iPhone sales was reported by Apple Inc. on Tuesday for the second quarter. This announcement essentially indicates that customers held out on updating their older iPhone models as they are anticipating the launch of the 10th anniversary edition of the most important product of the company. Due to this report, the share price of the tech giant, which has reached new highs this year after falling previously, were down by 1.2% and the company closed at a price of $145.78 in after-hours trading. The capital return program of the American firm saw a boost of $50 billion, which raised the quarterly dividend by nearly 10.5% and also increase the firm’s share purchase reauthorization by $35 billion.
On April 1st, the fiscal second quarter of the company ended and the American smartphone giant reported that it had sold about 50.76 million iPhones, which was a decrease from a year earlier when sales had been 51.19 million. According to the financial data provided by analysts, they had been expecting the sales to be somewhere around 52.27 million, so the results fell short of expectations. Nonetheless, there was an increase in revenue from smartphones in the same quarter as it increased by 1.2%.
Expectations have been on the rise this year in regard to the company’s expected launch of new iPhones, which are typically introduced in September of every year. This year will mark the 10 year anniversary of the iPhone, which was first introduced in 2007 by Steve Jobs. The phone has been the primary product of the company since then. Therefore, it doesn’t come as a surprise that investors are hoping the new devices this year would help in bolstering the firm’s sales, which have been flagging. The phones are launched in September and there is usually a jump in sales due to the holiday quarter.
After that, the demand tapers off in the next couple of quarters as customers decide not to upgrade as another launch is expected soon. The 10th anniversary edition of the iPhone is expected to have a horde of new features, which include wireless charging, a curved display and also 3-D facial recognition. The company’s forecast for the total revenue of the current quarter had been between $43.5 billion and $45.5 billion whereas the analysts had been expecting a return of $45.60 billion. As far as sales units in the current quarter are concerned, analysts are expecting them to be around 42.31 million.
In the second quarter, the net income of the Cupertino, California based firm increased to $2.10 per share or $11.03 billion as compared to a year earlier when it had been about $1.90 per share or $10.52 billion. There was a 4.5% increase in the second quarter as it reached $52.90 billion even though the average estimate of the analysts had been about $53.02 billion. The revenue of the smartphone giant derived from the Greater China region saw a decline of 14.1% and fell to $10.73 billion as cheaper rivals in the area impacted the sales.