In July, Apple's third-quarter revenue and net income fell for the second consecutive quarter as the iPhone maker reported $42.36 billion in revenue, down 15 percent from $49.6 billion a year earlier, and $7.8 billion in net income, a drop from $10.7 billion, according to a previous eWEEK story. That gave Apple year-over-year declines in revenue and net income for two straight quarters, which was in contrast with the company's prior string of 13 years of quarterly revenue reports without a decline, dating back to 2003.
The impressive streak ended in April when the company reported its Q2 financials, including revenue of $50.6 billion. That revenue was 13 percent lower than the $58 billion the company posted a year prior.
Hitting the company's Q3 revenue and net income hard was a 15 percent drop in global iPhone sales to 40.4 million units in the quarter, down from 47.5 million in the third quarter of 2015. Sales of iPads dropped 9 percent to 9.95 million from 10.9 million a year prior. Apple's Q3 revenue from U.S. sales fell 11 percent in the quarter to $18 billion from $20.2 billion the year prior, while its revenue in China dropped 33 percent to $8.8 billion from $13.2 billion in the third quarter of 2015.
The decline in iPhone sales that began in the second quarter had its roots in the first quarter of the year, when Apple sold 74.7 million iPhones, which was essentially flat from the 74.5 million sold in the same quarter a year earlier. In the fiscal first quarter, Apple's revenue was riding high at $75.9 billion, a new Apple record at the time. The company's first-quarter net income was $18.4 billion, which set another quarterly record, up from $18 billion in the same period a year earlier. Earnings rose to $3.28 per diluted share, up from $3.06 in the same quarter in January 2015.
But in this year's Q2, iPhone sales fell 18 percent to 51.2 million units from 61.2 million in the same quarter in 2015. The second-quarter iPhone sales were also down sharply—by 32 percent—from the 74.78 million in the first quarter of 2016. In dollars, iPhone sales dropped to $32.9 billion in the second quarter, down 18 percent from $40.3 billion a year prior.