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Apple Reports First Revenue Decline Since 2003


A 13-year winning streak ended yesterday. Apple reported a big drop in revenue compared to the same quarter last year. That hasn't happened since 2003. And the reason is iPhones just aren't selling like they used to. NPR's Aarti Shahani reports.

AARTI SHAHANI, BYLINE: It's a stunning fact, but for people inside the tech industry and for Apple's CEO Tim Cook, it's not surprising. He expected it.


TIM COOK: We sold 51.2 million iPhones in the quarter, consistent with the range of our own expectations.

SHAHANI: But lower, way lower than the year-ago quarter, when Apple sold about 10 million more iPhones. Cook was breaking the bad news on an earnings call. This is the first time ever that iPhone sales have declined, which raises a question. Is Apple's signature product past its prime, like a rock star whose best days are behind? Cook doesn't seem to think so.


COOK: With only 42 percent smartphone penetration of the global handset market today, iPhone is still attracting millions of first-time smartphone buyers each quarter, especially from emerging markets.

SHAHANI: What he's saying here in corporate speak is basically, lots of people on earth have yet to buy a smartphone. So there are plenty of potential customers out there, even if there's an economic slowdown in China, Apple's second-biggest market after the U.S. Cook shared a cheery stat about India, the third-largest smartphone market.


COOK: In India, our iPhone sales were up 56 percent from a year ago.

SHAHANI: That sounds great. But it could be short-lived. Maybe India's tiny handful of wealthy buyers are done buying, and the remainder won't be able to afford iPhones, new or refurbished. Wall Street analysts pressed Cook on India. And he admitted it has been hard there because the country lacks good networks. LTE rollout is just really beginning this year. And iPhones are really expensive in the country, where, yeah, poverty's an issue.


COOK: Market potential has not been as great there. But I sort of view India is where China was maybe 7 to 10 years ago.

SHAHANI: Apple will have to figure out how to push more product sooner than that. Aarti Shahani, NPR News, San Francisco. Transcript provided by NPR, Copyright NPR.

Aarti Shahani
Aarti Shahani is a correspondent for NPR. Based in Silicon Valley, she covers the biggest companies on earth. She is also an author. Her first book, Here We Are: American Dreams, American Nightmares (out Oct. 1, 2019), is about the extreme ups and downs her family encountered as immigrants in the U.S. Before journalism, Shahani was a community organizer in her native New York City, helping prisoners and families facing deportation. Even if it looks like she keeps changing careers, she's always doing the same thing: telling stories that matter.
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