Apple Reports Plunging Mac Sales Amid First Drop In Annual Revenue In 15 Years

For the first time in the iPhone era, Apple has seen its annual revenue decline on a year-over-year basis.

The Cupertino, Calif.-based company reported Tuesday that its fiscal 2016 revenue for the 12 months ended Sept. 24 came in at $215.64 billion. That represented a drop of 7.7 percent from $233.72 billion in sales the prior year, and marked the first decline in annual revenue for Apple since 2001.

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Along with falling sales of iPhones and iPads, the company's Mac product line saw a significant decline of 10.3 percent year over year for fiscal 2016. Mac revenue for fiscal year 2016 was $22.83 billion, down from $25.47 billion in fiscal 2015.

While the shrinkage of the global PC market is certainly one factor, Apple has also gone without major refreshes to many of its laptops and desktops for years -- including the MacBook Pro and Mac Pro.

"They've lost a lot of momentum [in the PC category]," said Stephen Monteros, vice president of business development at Sigmanet, an Ontario, Calif.-based Apple partner. "Now we're starting to see a lot more Chromebooks for businesses [instead of Macs]. What Apple used to have as far as market leadership with some of the hotter technologies, now people are starting to look at other things. … They haven't had anything fresh in a while."

Apple is set to hold a product event Thursday, and rumors suggest a new MacBook and MacBook Pro will be unveiled.

"My hope is they've got some answers" on the company's PC direction, Monteros said.

During Apple's earnings call Tuesday, CFO Luca Maestri said the company will have "some exciting news to share with current and future Mac owners very soon."

Apple CFO Maestri also highlighted data from the rollout of Macs through Apple's partnership with IBM. There are now 90,000 Macs in use by IBM employees, and IT management of the computers is one-third the cost of managing Windows PCs, according to Maestri.

Apple CEO Tim Cook said during the earnings call that he's "happy with the progress" of Apple's enterprise market initiatives overall, pointing to the new partnership with Deloitte as another bright spot.

Deloitte, ranked at No. 16 on the 2016 CRN Solution Provider 500 list, is launching a new Apple practice consisting of more than 5,000 strategic advisers, aimed at expanding the use of iPhones and iPads within the business world.

For its fiscal 2016 fourth quarter, ended Sept. 24, Apple reported sales of $46.85 billion, down 9 percent from revenue of $51.5 billion in the same quarter a year ago.

The quarterly results included roughly a week's worth of sales for the iPhone 7 and iPhone 7 Plus, which launched on Sept. 16.

During the earnings call, Cook said that demand for the newest iPhones is "outstripping supply in the vast majority of places, particularly on the iPhone 7 Plus."

Apple’s net income for the fiscal fourth quarter was $9.01 billion, down 19 percent from $11.12 billion in the year-ago quarter. Earnings per share was $1.67 in the quarter compared with $1.96 one year earlier.

For fiscal 2016 on the whole, Apple reported net income of $45.68 billion, or $8.31 a share. That's down 14.4 percent from fiscal 2015, when profits reached $53.39 billion, or $9.22 a share.