Apple posts worst quarterly earnings since 2003, Apple Music subs grow to 13M

As predicted by the company back in January, Apple CEO Tim Cook has announced earnings from its “very busy and challenging” last quarter.

The 13% drop in revenue to US$50.6bn and US$10.5bn in profits (from US$58bn in revenue and US$13.6bn in profits in this period last year) marks the first time the company’s failed to grow its business in 13 years, or in 51 successful quarters. Apple is also predicting another drop in revenue of 15%next quarter.

What Cook called a “pause in growth” on last night’s earnings call is predominantly due to slowing iPhone sales and possibly the lack of a new ‘must-have’ gadget.

While the tech giant has reported an inability to match the success of last year’s iPhone 6, the “other products” category, which includes Apple TV, Apple Watch and Beats products, saw revenues jump 30% to US$2.2 billion. To compare the growth, Apple sold 6.1 million iPhones in their first year on the market and since the Apple Watch hit the market last April, 15.5 million have been sold.

Growth has also been reported in Apple’s services category, which includes iTunes and Apple Music. The category was the second largest revenue generator behind iPhones during the quarter.

Cook also revealed Apple Music now has 13 million paying subscribers, up by 2 million subscribers since Apple last disclosed numbers in February. The streaming platform still sits well behind market leader Spotify, which claims75m; but it’s leading ahead of fellow paid tier-only service Tidal, which claims 3 million subscribers.

Despite being the largest company in the world with a record $233 billion in assets, a market capitalisation of about US$579 billion and deep pockets for products involving virtual reality and automobiles, investor concerns affected Apple stock overnight. In fact, stock dropped as much as 8.5% to US$95.51 in extended trading after the report was released.