Apple announces sales of iPhones have dropped 7 percent amid coronavirus pandemic as profits fall 2 percent to $11.2billion
- Apple saw a decline in iPhone sales and profit due in the first quarter
- Production and sales were affected by an ongoing COVID-19 pandemic
- Despite the dip declines were less sever than initially expected
- Declines are expected to worsen as the year goes on
- Here’s how to help people impacted by Covid-19
A pandemic and lumbering economy saw Apple’s first quarter iPhone sales and profits take a dip.
The less than ideal quarter reflects early fallout from a coronavirus pandemic that shut down factories and forced hundreds of Apple retail stores to shutter.
The results give the first sign of how one of the world´s best-known companies is faring as the economy plunges into its first recession in more than a decade.
While Apple says that revenue increased up by 1 percent from the same time last year to $58.3 billion, iPhone sales declined by 7 percent year-over-year and profits fell to $11.2 billion – a 2 percent decrease over last year.
Apple saw a dip in both iPhone sales and profits as its struggled to deal with fallout created by an ongoing COVID-19 pandemic
Despite the decline, Apple’s sales were far better than analysts had feared in part due to the release of its more budget-friendly iPhone SE last month.
The tech giant’s supply chain has been constrained by the COVID-19 outbreak which first spread in China where the company was forced to temporarily close local factories that make most of its iPhones and other products.
Those factories are open again, but the closures created ripple effects that are expected to delay the release of Apple’s next iPhone models by at least a month this fall.
According to a recent forecast from Goldman Sachs, an Apple partner that helps power the company’s branded credit card, the tech giant isn’t expected to launch upcoming iPhone 12 models until early November, a month after previously slated.
Analysts at Goldman Sachs have since downgraded Apple’s stock to ‘sell’ citing the COVID-19’s effect on global travel, production, and delays in the engineering and production process of its next flagship device.
Goldman Sachs said it expects iPhone shipments to drop 36 percent during the third quarter due to coronavirus-related lockdowns around the world and downgraded Apple Inc stock to ‘sell.’
The iPhone SE has a 4.7-inch screen and physical Home button with TouchID fingerprint reader comes in three colours — black, white and red
The brokerage firm also predicted that the average selling prices for consumer devices are likely to decline during a recession and remain weak well beyond the point when units recover.
‘We do not assume that this downturn results in Apple losing users from its installed base’ a Goldman Sachs analysts said in a note.