The price of Apple shares dropped like a rock earlier this year after the company reported a worse than expected decline in iPhone sales for the March quarter. On year, iPhone units sales plummeted by 10 million iPhones, which inevitably led to doomsday prepping among finicky investors. The tide turned quickly though, and Apple share have since recouped those losses and then some when June-quarter earnings were better than expected.
Of course, iPhone sales are still sinking despite how well the fiscal third quarter was aligned with investor expectations, and Apple isn’t the only company that relies on iPhone sales as its chief moneymaker.
In the June quarter this year, Apple managed to ship 40.4 million iPhones. That figure is hugely impressive and it was in line with Wall Street’s expectations, but it still represents a steep decline compared to the same quarter last year, when Apple sold 47.5 million iPhone units thanks to insanely strong iPhone 6 and iPhone 6 Plus sales.
For Apple, that meant seeing its fiscal third-quarter revenue slide to $ 42.4 billion this year compared to $ 49.6 billion in the same quarter last year. But the iPhone isn’t crucial solely to Apple’s business, of course. Thousands of companies around the world rely on the iPhone make money. Most of them are app developers, which often rely entirely on iOS app sales for income. Of course, Apple’s component suppliers and manufacturing partners also rely heavily on the iPhone, and they’re taking big hits as iPhone sales slump.
Earlier this week, iPhone and iPad display supplier Japan Display asked the government for what is essentially a bailout to help cover huge revenue declines that have resulted from weakening iPhone sales. Japan Display generates about half of its revenue from supplying displays for Apple devices, so Apple’s declining sales have had a massive impact on the company.
Fast-forward to Thursday, when Apple’s top iPhone manufacturing partner Foxconn posted a massive 31% decline in second-quarter net profit due to a sharp drop-off in iPhone orders. The company said its profit sank to 17.7 billion New Taiwan dollars from 25.7 billion during the same quarter last year.
Apple is expected to unveil the new iPhone 7 and iPhone 7 Plus on September 7th ahead of their release on September 16th, and the refresh will likely help slow the decline or even level. Still, Apple’s iPhone business isn’t seen returning to any meaningful growth until next year when Apple releases its big tenth-anniversary iPhone refresh.