Apple reports first fall in profits in decade
Computer and smartphone maker Apple has reported its first fall in profits in 10 years. The fall in profits is based on revenue for the first quarter of this year, from January to March. The company made a net profit of $9.5bn (£6.2bn), which is down from $11.6bn last year.
Concerns for the future of Apple have damaged their share price recently. Shares were valued at just under $400 this time last week, which was a 16 month low for the company.
Slowing demand and increased competition have been blamed for the reduction in shares value.
However, the company is still maintaining that the results were better than expected, as strong iPhone and iPad sales boosted revenue to $43.6bn. The company said it sold 37.4 million iPhones and 19.5 million iPads over the world across the 3 month period.
Tim Cook, CEO of Apple said: “Though we’ve achieved a credible scale and financial success, we acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012.”
Apple is still a dominant player in the tablet and smartphone markets, but investors are concerned that the market share is being reduced as competition from rival firm Samsung for example, increases.
Analysts have suggested that the company needs to innovate and develop new products, rather than improving existing products, such as the iPad 2, or the iPhone 5, which was described by critics as an ‘iPhone 4 with a bigger screen’.
Lauren Balter, an analyst at Oracle Investment Research said: “The market is tired of the same old thing at Apple. Investors are looking for innovation. The reality is that people are looking at other products now and they are looking at other cool features from competitors.”
However, Mr Cook tried to reassure investors and customers: “The decline in Apple’s stock price over the last couple of quarters has been very frustrating for all of us… but we’ll continue to do what we do best.”