Apple posted its worst quarterly financial results in more than a decade on Tuesday. Sales of iPhones, iPads, and Macs all fell by double digits, leading to a 13 percent drop in total revenue. The markets have reacted harshly, with the company's stock losing more than 7 percent of its value in after-hours trading.
Apple is still an enormously profitable company — it pulled in more than $10 billion in net income last quarter. The iPhone has been one of the most successful consumer products in world history. It's an almost impossible act to follow.
In April 2007, a few months before the iPhone first appeared in stores, the company reported that it had sold 1.5 million Macs and 10.5 million iPods between January and March 2007, generating $2.3 billion and $1.7 billion in revenue, respectively.
Today, of course, those figures look puny. Between January and March 2016, Apple sold 51 million iPhones, generating $33 billion in revenues — more than 10 times as much revenue as the iPod generated in its heyday. In addition, Apple sold 10 million iPads and 4 million Macs, for another $10 billion in revenue.
Apple's financial results are only disappointing compared to the very high expectations set by previous quarters' results.Apple hasn't provided sales figures for the Apple Watch, but estimates suggest that it's only a modest hit so far.
Presumably, Apple is working on other products that it hopes will be big hits. Maybe the rumored Apple Car will generate iPhone-level revenues and profits. But if Apple fails to find a successor to the iPhone, that won't be a sign that they've done anything wrong. iPhone-level hits are just very, very rare.