Apple posted a surprise dip in iPhone sales tonight, suggesting customers are putting off purchases to wait for the new model of its flagship device.
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The tech giant announced it had disappointed with a fall in iPhone sales during the second quarter, down to 50.8m compared to 51.19m from the same period the year before.
Analysts had expected Apple to reveal sales of more than 52m. Shares of the company slipped in after hours trading, down 2.1 per cent to $144.37.
Despite the fall in sales, iPhone revenues rose 1.2 per cent for the quarter, bolstered by a higher average selling price.
Apple did beat analyst expectations on earnings, with quarterly earnings per diluted share of $2.10 compared to analysts' forecast of $2.02.
It expects third quarter revenue to come in between $43-45.5bn, under expectations for third quarter guidance to be nearer $45.7bn.
Apple also announced it will increase the size of its capital return programme to $300bn by the end of March 2019, including $210bn worth of share buybacks and a 10.5 per cent dividend increase.
Why it's interesting
Investors have been anticipating a significant upgrade to the iPhone later this year; Apple tends to release its new phones in September and with the likes of Samsung and LG Electronics recently releasing new competitors, the pressure is on for Apple to match building expectations.
Steven Milunovich, an analyst with UBS, wrote in an investor note this week: “It appears Apple users are holding off upgrading but not necessarily leaving the ecosystem. Investors need faith that users are waiting rather than switching.”
The tech giant was expected to post a solid quarter after a bumper first quarter surpassed investor expectations thanks to record-breaking iPhone sales.
What the company said
Apple's chief executive Tim Cook said: “We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus.”
And chief financial officer Luca Maestri said the decline was not as bad as it appeared, due to how phone sales are calculated.
The firm reports so-called “sell-in” figures for the iPhone, which measures how many units are sold to retailers, rather than “sell-through” figures, which calculates how many phones are sold to customers.
Maestri said Apple reduced the volume of inventory going through its retail channel by about by 1.2m units in the quarter, meaning the firm sold around 52m phones to customers on a sell-through basis.