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Apple facing its first decline in sales since 2001

Tec giant Apple is facing its first decline in sales since 2001. The decline was mainly due to mixed sales performance of the iPhone, which represents over 60% of revenue of the firm. During its last fiscal year ended Sept. 24, Apple posted decline in its revenue. This was down 8% to 215.6 billion dollars (198 billion euros). The firm however anticipates a modest growth in the last quarter, thanks to the holiday season ahead.  Apple could also particularly benefit the setbacks encountered by Samsung, its South Korean rival had to withdraw its flagship the Galaxy Note 7 from sale because of a problem with the battery, which exploded.

Between July and September, the revenue of Apple declined for the third consecutive quarter, to $ 46.9 billion, a level consistent with the predictions of Wall Street analysts. The trend is positive however: the decline of turnover amounted to 9%, against 14% in the previous six months. The company’s profits also fell (- 19% to $ 9 billion). Over the whole year, they reached $ 45.7 billion (- 14%).

The unprecedented decline after fifteen years of Apple’s business is mainly due to the bad performance of the iPhone, its flagship smartphone which represents over 60% of its revenue. Launched in September 2015, 6S and 6S Plus models are not as attractive as their predecessors. These were the first iPhones to feature large screens, similar to those offered by competitors for years. The sales of the device show three consecutive quarters of decline.

Between July and September, the tech giant from California has sold 45.5 million units, against 48 million in 2015. This decline is all the more remarkable as the launch of the iPhone 7 occurred a week earlier than that of 6S range in 2015.

More worryingly, Apple suffers tight competition from Chinese manufacturers such as Huawei, Oppo, Vivo and Xiaomi. Its performance deteriorated significantly in China, which has long been one of the main growth drivers. In the last quarter, sales were down 30%. Other product sales were also struggling. IPad sales posted their eleventh consecutive quarter of decline, although the arrival of a “pro” version, sold more expensive, has helped stabilize the revenue generated by the tablet. Sales of Macs also fell, as the overall PC market.

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