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Will Apple have financial problems?

Will Apple have financial problems? This is the question that everyone is asking after the Q1 revenue announcement.

The company has declared that they have sold during the first quarter approximately 74.8 million iPhones. These number has missed Wall Street expectations and it actually meant the slowest growth registered since Apple has been selling smartphones, more exactly in 2007.

Moreover, the sales from the first fiscal quarter are flat compared with the same quarter last year. Last year in the same period, Apple has sold 74.5 million units. This isn’t a really good sign, even if the sales haven’t got lower. Analysts had high expectations from Apple on this first quarter, claiming that they have thought that Apple will sell somewhere around 76.3 million units.

What is even worse? 

Apple financial problems
Well, Apple has predicted that the sales from the next quarter will be even lower. Tim Cook, Apple's CEO, is blaming the global economic softness and the stronger value of the US dollar for this situation.
We are seeing extreme conditions unlike anything we have ever experienced before," Tim Cook has declared.
This is definitely a huge hit for Apple, because approximately two-thirds of the company’s revenue comes from the iPhone.

These results raise a lot of questions, for example if people are starting to get bored of the iPhone, if Apple’s phone doesn’t have anything new and interesting, or if the Apple Watch should be bigger.

However, one thing is sure, it seems that customers weren't that excited about Apple’s new products, like the bigger iPad and the Apple Watch. However, this doesn’t mean that Apple didn’t have success on the market in the last couple of months.

For example, the redesigned iPhone 6, which was released in September 2014, has turned out to be very popular and led the company to report in last year’s first quarter the highest profit ever. So, this means that Apple once again reported the most profitable quarter in history.

But, unfortunately, the latest smartphone models from Apple, the 6S and 6S Plus, didn’t come with very interesting new features so customers weren’t that attracted. Moreover, the economy of China has been struggling in the last period. To be added that China is one of Apple’s most important markets.
We’re seeing extreme conditions just about everywhere we look, major markets including Brazil, Russia, Japan… have been impacted by slowing economic growth, falling commodity prices and weakening currency,” has declared Tim Cook. “We saw softness in China, noticeably in Hong Kong,” he continued. 

To be added that not only the iPhone is going through a bad period. Even the iPads are facing some crises. The Cupertino, California-based tech giant has sold 16.1 million iPads, which is considered to be another miss from what was expected.

Another miss came from Mac, which has been sold in 5.3 million units. Both of these products also represented declines from the first quarter last year.

An interesting rumor has been traveling around Apple, claiming that the tech giant is planning to enter the VR market. However, Tim Cook didn’t confirm this rumor but he declared: “It’s really cool and has some interesting applications.”
Will Apple have financial problems? Reviewed by Mike Beasley on 2:03 PM Rating: 5
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