Apple has biggest quarterly revenue decline since 2016

Apple has announced that it has recorded the biggest fall in revenue over a quarterly period since 2016, with the last quarter coming in at five percent down on the previous year.

When everything has been counted up, this drop is the largest revenue decline that Apple has seen over a quarter for years now, and their first yearly sales decline since 2019.

That means that Tim Cook – the CEO of the company – has been rolled out to explain why he thinks that is.

Three things seem to have made life difficult, to his mind – a strong dollar, problems with production of the newest iPhone 14 Pro and 14 Pro Max models, and the wider economic situation.

Well, we can all pretty much agree on the overall economic situation, can’t we?

Cook told CNBC: “On the third factor, I would say was just the challenging macroeconomic environment, and you’re hearing that from, I would think, everybody.”

This news obviously had an effect on shareholders, with the Apple share price dropping by as much as four percent at one stage on Thursday, before it then rose back again once data was provided by Apple about what they expect to happen this quarter.

Cautiously, it seems as they are of the belief that things won’t decline as quickly this time out as they did in the quarter running up to Christmas.

In general, it seems as if people had to tighten the belt last Christmas, and with good reason, too.

Whilst they didn’t provide an actual estimate for what they reckon will happen in the next quarter – they haven’t since 2020, as it happens, citing Covid uncertainty amongst their reasons – Apple did offer some performance data expectation points.

Their Chief Financial Officer Luca Maestri said that the quarter set to end in March will also see a declining trend, but not quite as rapidly as they did last quarter.

Missing their forecast this last quarter is a big deal for Apple, because it’s the first time they’ve missed out on expectations for nearly seven years.

It’s only the second time they’ve missed revenue expectations since August 2017.

As a result of the drop in revenue, Cook admitted that Apple is slowing down on hiring staff, as well as cutting back on costs.

However – unlike a lot of tech companies – they haven’t announced any lay-offs yet.

“We’re also recognizing the environment that we’re in is tough,” he said. “And so we’re cutting costs.

“We’re cutting hiring, we’re being very prudent and deliberate on people that we hire.”

Still, there is some good news for Apple, because they did report a six percent growth in their services business, performing above expectations.