NEW YORK — Apple announced its worst quarter in more than a decade on Tuesday.
Apple reported its sales and profit fell last quarter, a rarity for a company that has been growing at a rapid pace, even as it has become the largest technology company on the planet.
The last time Apple’s sales fell year over year was the first quarter of 2003. At that time, the PowerMac was still the company’s bestseller. Apple had sold a grand total of 611,000 iPods. And Apple hadn’t yet launched the iTunes Music Store.
Now, more than two-thirds of Apple’s revenue is made up of iPhone sales. So where the iPhone goes, so goes Apple — and last quarter was a miserable one for Apple’s signature gadget. IPhone sales fell for the first time in history.
But ever-sinking iPad sales and flat-lining Mac demand didn’t help Apple’s case either. Neither did a strong dollar and a very weak Chinese market.
“We had a very busy and challenging quarter,” CEO Tim Cook said on a conference call with investors. “Despite the pause in our growth, the results represent excellent execution by our team in the face of strong macroeconomic headwinds.”
Wall Street analysts had predicted Apple would have a somewhat lousy quarter. But they didn’t think it would be quite this bad. Apple’s stock plummeted 8 percent in after-hours trading, to below $100 a share.
IPhone
First quarter of 2015: 61.2 million. First quarter of 2016: 51.2 million, down 16 percent.
It was going to be hard for Apple to beat iPhone sales from the same quarter a year ago, when the iPhone 6 debuted in China. Apple released the iPhone 6S to China in September along with the United States, so it didn’t get the first-quarter iPhone boost that it had from Chinese customers a year earlier.
Apple sold slightly more iPhones last quarter than Wall Street analysts had expected.
IPad
First quarter of 2015: 12.6 million. First quarter of 2016: 10.2 million, down 19 percent.
IPad sales fell for the ninth straight quarter, though they inched past analysts’ forecasts.
Mac
First quarter of 2015: 4.6 million. First quarter of 2016: 4 million, down 12 percent.
PC sales fell by 10 percent worldwide last quarter, according to Gartner. Apple had been outpacing the overall industry, but this is the second straight quarter in which Mac sales performed worse than the overall PC market.
Mac sales were relatively abysmal, badly missing Wall Street analysts’ expectations. They expected 600,000 more Macs to be sold during the quarter.
Profit
First quarter of 2015: $13.6 billion. First quarter of 2016: $10.5 billion, down 22 percent.
Apple’s profit hadn’t fallen since the last quarter of 2013.
The last time Apple reported earnings, it posted the most profitable quarter in corporate history.
Sales
First quarter of 2015: $58 billion. First quarter of 2016: $50.6 billion, down 13 percent.
The double-digit sales loss was Apple’s first since the fall of 2001. At that point, Windows 98 was the dominant computer operating system, and no one knew what an iPod was because it hadn’t been introduced yet.
But for some perspective, Apple is expected to have produced more revenue in an off-quarter than the company posted in all of 2009.
The strong dollar hurt Apple, just as it has hurt many other American companies this past quarter. Had the dollar not strengthened from a year earlier, Apple said sales would have been down just 9 percent.
Current quarter’s sales
Second quarter of 2016 forecast: $41 billion to $43 billion in sales.
Apple’s forecast was well below Wall Street analysts’ initial expectations. They had been expecting sales of $47.4 billion for the current quarter before Apple issued its outlook.
It’s even farther below the $49.6 billion in sales Apple posted during the second quarter of 2015.
Apple analysts have their collective fingers crossed that the iPhone 7 can reboot the Apple sales growth machine. In the meantime, the next few quarters are going to be stinkers.
China sales
First quarter of 2015: $16.8 billion. First quarter of 2016: $12.5 billion.
Sales in all regions fell, but none more than in China, where sales fell by 26 percent.
Cash
Fourth quarter of 2015: $216 billion. First quarter of 2016: $232.9 billion.
Apple posted another record cash hoard. Some critics would like to see Apple use that cash to buy up assets that will help the company grow stronger.
As a result, Apple increased its share buyback program by $35 billion and upped its quarterly dividend to 57 cents per share.