Apple has forecast its first sales decline since 2003, with the company arguing that the decline is the result of stalling iPhone sales in an increasingly saturated smartphone market.
According to Apple, revenue for the second quarter of the financial year will be somewhere between $50 billion and $53 billion, representing the first quarterly drop for the company since 2003, and below estimates of $55.5 billion.
The news follows a holiday quarter in which iPhone sales were well below projections, reinforcing the idea that Apple's push into China won't save it from a worldwide slowdown in smartphone sales. Despite the fact that iPhone sales were below projections, the company still sold more units than last year, a trend that isn't expected to continue as the year moves on.
Of course, Apple remains extremely profitable as a company, having generated $18.4 billion in net income on sales of $75.9 billion, on par with the company's projected $76 billion sales for its December quarter. These results represent the highest-ever quarterly results for the company.
"This is a huge accomplishment for our company, especially considering the turbulent world around us," said Tim Cook in an earnings call to investors.
According to the company, it sold 74.8 million iPhones in the first quarter of the financial year, a little less than the 75.46 million expected iPhone sales.
Apple does have plenty of other products to try to increase its business in, and has released products like the Apple Watch in an effort to expand its business over the past year. Despite this, the iPhone-shaped hole is going to be a big one to try and fill for the company.
According to Apple, the strength of the U.S. dollar against other currencies is also partly to blame for a projected decrease in revenue - $100 in sales during the fourth quarter of 2014 would now only be worth $85 because of exchange rate changes.
"Two-thirds of Apple's revenue is generated outside the United States, so foreign currency fluctuations impact us very much," continued Cook.
While the next quarter will be difficult for the company, Cook argues that the company will get better as it moves forward.
