Highlights from Apple’s Q2 2016 Earnings

Apple announced the financial results for its fiscal second quarter of 2016 this afternoon, and the numbers are pretty rough. While they fall within the company’s own guidance, iPhone sales are down 10 million units from the year-ago quarter, and revenue is down $7 billion.

The news wasn’t all negative with some positive reports from the company’s Internet Services business, which is performing well thanks to consumer interest in Apple Music. These financial tidbits are just a small part of what Apple announced –read on for some highlights from the financial side of Apple’s business.
  • Cook: “It was a challenging quarter for the company.”
  • Apple now has $232.9 billion in cash and marketable securities.
  • Apple expanding capital return program by four quarters and $50 billion. Total buyback will be $250 billion.
  • Apple has made 15 acquisitions in the last 4 quarters, and is constantly on lookout
  • Apple Music now has 13 million paying subscribers
  • Services revenue (iTunes, etc.) was highest ever, up 20% to $6 billion
  • Now more than 10 million contactless locations in Apple Pay countries, 2.5 million in U.S. alone.
  • Cook: “iPhone SE demand exceeds supply, but we’re working hard to meet demand.”
  • Upgrade rate for iPhone 6s has been higher than 5s cycle two years ago, but lower than 6 cycle.
  • Customers are also incredibly loyal. 95% loyalty rate, highest for any smartphone.
  • Added more switchers (from Android, etc.) in first half of 2016 than any other six month period
  • Cook: “We’re really excited about the first year of Apple Watch, and it has an exciting future.”
  • Other Products revenue up 30% thanks to Apple Watch.
  • Customers very happy with Apple Watch, 94% customer satisfaction.
  • Cook: “In June quarter, we expect best iPad unit comparison in over two years thanks to new iPad Pro.”
Overall, the quarter was not a strong one for Apple. The company sold 51 million iPhones in the quarter, down from 61 million in the same quarter last year. Revenue also dropped from $58 billion in 2015 to $50.6 billion in 2016. Despite an optimistic conference call, Apple expects this downward decline to continue with revenue of $43 billion forecasted for the upcoming Q3 2016. What do you think of Apple’s Q2 2016 results? Let us know in the comments.

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