Apple Inc had seen nothing but growth for 13 years, largely because of the sales of its claim to fame, the iPhone. It was a record of success few corporations could rival.
That winning streak was snapped on Tuesday. The company made its quarterly report and showed that the sales of its iPhones had decreased by 16% compared to the previous quarter. It was the first such decrease in the product’s history. This news had a crippling effect on Apple’s stocks, causing the value of its shares to decrease by 7%.
“The company relies on iPhone sales not only for profit but also to extend their ecosystem,” says Gartner analyst Brian Blau. “By any measure a $10 billion profit in a quarter would be great performance, but for Apple that high level is simply getting by.”
The decrease has been attributed to cheaper products offered by rival manufacturers, a lack of presence in key market areas such as China, fewer new products and features, and the simple fact that Apple as a company has become so enormous.
“There’s no question that Apple’s best days are behind it,” said Toni Sacconaghi, an analyst at the Bernstein brokerage firm. “The company grew at astronomical rates, and it’s now so big that its ability to grow at those rates doesn’t exist anymore.”
Despite the bad news, Apple CEO Tim Cook offered an optimistic view of the company’s future, calling the downturn a “pause.”
“The SE is attracting two types of customers, who want the latest tech in a more compact package, and there are more than we thought in that category. And those who want an iPhone but couldn’t afford the entry price before,” Cook told analysts. “We’re excited where this can take us.”