Apple Sells Fewer iPhones as Consumers Wait for Big Upgrade

Apple reported falling iPhone sales, highlighting the need to deliver blockbuster new features in the next edition of the flagship device if the company is to fend off rivals like Samsung, according to Bloomberg.

Apple sold 50.8 million iPhones in the quarter ended April 1, down from 51.2 million units in the same period a year.  "We’re seeing what we believe to be a pause in purchases of iPhone, which we believe are due to the earlier and much more frequent reports about future iPhones," Apple CEO Tim Cook said during a conference call with analysts.

Apple had $257 billion in cash and equivalents at the end of the quarter. The company said it will return more of that to shareholders, announcing $50 billion in new buybacks and a 63-cent dividend. Analysts had forecast 62 cents, up from the 57 cents paid in its 2016 fiscal year. The company had already announced $175 billion in repurchases, helping maintain the stock price in lulls between new products. The company also forecast $43.5 billion to $45.5 billion in revenue for the current quarter, below analysts’ estimates of $45.7 billion.

Much is riding on the success of the next iPhone. Smartphone sales growth has been slowing and Apple has lost market share in China, a major source of growth before last year, amid increased competition from local rivals. Apple benefited from Samsung’s recall of its Galaxy S7 smartphone last year, but the South Korean company followed up with the introduction of the well-reviewed Galaxy S8 in April. If S8 sales are strong, that may mean fewer new customers for the new iPhone and the services businesses that feed off the device.

Cook has repeatedly sought to highlight Apple’s services, the fastest growing part of the company last year. Sales of offerings like iCloud, the App Store and Apple Music grew 18 percent to $7.04 billion in the quarter.  Apple’s offshore cash reserves climbed to $240 billion at the start of April, according to the CFO Luca Maestri. He said it was too early to say how Apple might spend any cash it brings home.