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2016 Was a Terribly Painful Year For Apple Inc. (AAPL)

Apple stock

For Apple Inc. , 2016 was a difficult year in which the Cupertino-based tech giant’s iPhone sales dropped for the first time in more than a decade. The company’s biggest disappointments in this year include: falling iPhone sales; a lack of love for the Mac; a disappointing iPhone 7; an unconvincing Apple Watch 2; a lack of innovation; and delayed launch of AirPods, according to a report from Cult of Mac.

Apple’s First Annual Revenue Decline Since 2001

During the fiscal fourth quarter ended September 24, Apple reported a 9.8% decline in revenue to $46.9 billion and a 23% drop in its profit to $9 billion from the same period one year earlier. The decline is attributed to weak sales of the iPhone, which fell 13% year-over-year to 45.5 million units, The Verge reported.

iPhone sales account for about 60% of the company’s total revenue. For the full year, the iPhone maker reported its first annual revenue drop since 2001.

During the fiscal fourth quarter, the iPhone maker posted a 17% decline in Mac sales to $5.7 billion due to a 14% decline in unit sales. The iPad sales dropped by 6%, but revenue remained stable due to the more lucrative iPad Pro line.

In October, Apple Inc. launched the iPhone 7 and iPhone 7 Plus. The new models come with improved camera and some minor upgrade, but it was really a big hit. “The iPhone 7’s reviews epitomized the “yeah, it’s OK” type of responses that are unfortunately becoming par for the course for Cupertino,” according to Cult of Mac.

The tech giant unveiled the new MacBook Pro models at the end of October. The 15-inch MacBook Pro boasts a Touch Bar and a dedicated Siri key with a new Radeon Pro 400 Series GPU. From a consumer standpoint, the MacBook Pro was the most notable disappointment. Many users were unhappy with a high price for the new MacBook Pros which comes with the limited memory options.

Apple in China

China, the world’s second-largest economy, is an important market for Apple which in the third quarter saw a 30% year-over-year decline in sales from the Greater China segment. Its revenues in Greater China fell 33% year-on-year in its fiscal third quarter.

The majority of future growth for the Cupertino-based tech giant depends on its strong foothold in China. But the company has been losing market share to domestic Chinese brands including Huawei, OPPO, and Vivo.

Earlier this year, billionaire investor Carl Icahn sold his entire stake in Apple on concerns about the company’s growth in China. “We made several billion dollars on [Apple]. I don’t think anybody can tell you that China is not going to have a problem, even though it might be a very small one,” Icahn had said.

As part of its efforts to reverse falling sales and regulatory hurdles in China, Apple Inc. plans to boost its investments in the world’s second-largest economy. During his recent visit to China, the company’s CEO Tim Cook had spoken with senior government officials and pledged to expand the iPhone maker’s presence across the country.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.