Apple's iPhone and iPad struggles are real

IPad sales declined in Apple's fiscal first quarter compared to last year and iPhone sales will do the same during the current quarter

Apple released financial results for its fiscal first quarter and the company has problems in two of its biggest footholds in the enterprise: iPhones and iPads. It sold only 300,000 more iPhones in the quarter ending Dec. 26 – 74.8 million devices – compared to the same quarter the year earlier, according to executives who spoke on a conference call for financial analysts on Tuesday.

For the current quarter, ending in March, Apple expects to sell fewer iPhones than the same quarter last year. That's a significant milestone for a company that has done nothing but grow iPhone sales since the phones hit the market.

Plus, iPad unit sales tanked. Apple sold 16.1 million in the Dec. quarter, compared to 21.4 million in the year earlier.  

Apple's in a tough spot. So much of its business now revolves around the iPhone, not only because of historical stellar sales but because Apple has been betting on the iPhone's strong foothold in the enterprise to help boost iPad sales, in the midst of slowing industry-wide tablet sales. A slowing of the growth rate of iPhones could result from a number of factors but whatever the reason, that slowing growth could have a significant negative impact on Apple's ability to stay relevant, particularly in the enterprise.

Apple is continuing to work on ways to drive iPhone and iPad use in enterprises. For instance, it's continuing to support deals with IBM and Cisco to develop apps and services for enterprise users of iPhones and iPads. It also added 25 partners to its mobility partner program in the recent quarter.

But the days of huge growth for iPad and iPhones in the U.S. might be nearing an end. Apple CEO Tim Cook suggested that iPhone growth in the future will come from emerging markets.

Still, don't count out Apple's efforts at developing new products that might light some new excitement behind the company. While the company didn't divulge iWatch sales, and the assumption is they didn't blow up during the quarter, Apple might be working on some new virtual reality technologies.

"I don't think it's a niche," Cook said, of virtual reality. "It's really cool and has some interesting applications."

While the company hasn't said much more than that, it has been hiring virtual reality experts recently. An Apple VR product could primarily serve the consumer market but there are obvious applications for enterprise users as well.

Apple reported revenue of $75.9 billion for the quarter ending Dec. 26. That's below analyst expectations, which were $76.6 billion, according to the Wall Street Journal. The revenue just barely met Apple's own expectations, which it set in October at between $75.5 billion and $77.5 billion.

For more:
-- see Apple's press release

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