Apple’s annual revenue has fallen for the first time since 2001. The company went from $233.7 billion in 2015 to $217 billion in the 2016 fiscal year. This marks a 9 percent decline since 2001, largely due to the continued decline in iPhone sales, down 5 percent year over year.
The company sold 45.5 million iPhones in the fourth quarter—also its final quarter of fiscal 2016—though that includes just two weeks of iPhone 7 sales and only the earliest signs of Samsung’s Galaxy Note7 catastrophe impact.
As such, Apple made a $9 billion profit from $46.9 billion in revenue in Q4 of 2016, down year-over-year from an $11.1 billion profit off $51.5 billion in Q4 of 2015. And while profits and revenue are down pretty much across the board, Apple is again choosing to focus on its services, a bright spot in the company’s portfolio. Services revenue, which includes iCloud, Apple Music, iTunes, and the App Store, grew 24 percent to $6.3 billion in the fourth quarter.
Analysts had expected Apple to sell 45 million iPhones, 8.5 million iPads, and 5.1 million Macs, resulting in revenue of $47 billion—better than most companies, but down from $51.5 billion year-over-year. Apple itself anticipated revenue of $45.5 billion to $47.5 billion. The company did both better than expected, with iPhone sales better than anticipated and 9.2 million iPads sold, and worse, with 4.9 million Macs sold.
Mac revenue slid by 17 percent in year-over-year analysis, a trend which Apple looks to halt via the release of its next-gen MacBook and MacBook Pro notebooks this Thursday at its October 27th media event.
So, Apple’s still making a good profit, but it’s declining and some new blood seems to be sorely needed to make up for the shortfall.