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Apple upbeat despite first-ever iPhone sales drop

Apple upbeat despite first-ever iPhone sales drop 

The California-based technology company reported that it sold 51.2 million units of the phone during the first quarter of 2016, down from 61.2 million in the same quarter in 2015. The iPhone accounts for 65 per cent of Apple’s revenue. The figures are still slightly above the 50 million units predicted by some analysts. The company also reported revenue of US$50.5 billion, down from $58 billion in 2015. This is the first slide in revenue reported by Apple since 2003.

Tim Cook, the company’s CEO, struck an upbeat cord.

“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Cook. “We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”

Apple’s board of directors also authorized an increase of $50 billion to the company’s program to return capital to shareholders. Under the expanded program, Apple plans to spend a cumulative total of $250 billion of cash by the end of March 2018.

“We generated strong operating cash flow of $11.6 billion and returned $10 billion to shareholders through our capital return program during the March quarter,” said Luca Maestri, Apple’s CFO. “Thanks to the strength of our business results, we are happy to be announcing today a further increase of the program to $250 billion.”

As part of the updated program, the board has increased its share repurchase authorization to $175 billion from the $140 billion level announced last year. The Company also expects to continue to net-share-settle vesting restricted stock units.

Some retailers, however, were not pleased customer reaction to the new iPhone, according to Reuters which took a survey of 10 retailers in Hong Kong, Beijing, Shanghai and Shenzhen. The poll included four Apple stores.

According to Reuters, the stores reported solid demand in the beginning but three third-party stores reported weak sales. Two suppliers of iPhone components also said orders for parts were slowing.

China is Apple’s second-largest market after the United States.

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