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Apple’s Q2 numbers: iOS sales, 13m Apple Music subs, record Android switchers, Apple Pay growth, more

With drops in revenue and iOS device sales in what CEO Tim Cook called a “challenging quarter,” highlights from Apple’s Q2 2016 earnings today include an increase in Apple Music subscribers, more cash for Apple’s capital return and share repurchasing programs, and a “huge number of Android switchers and new to Mac customers.” Cook said the company had record switchers from Android and others platforms in the quarter and also noted an increase of 56% for iPhone sales in India despite an overall decline for iOS device sales.

Cook said the company hit record App Store revenue up 35% and updated us on Apple Pay noting the payments service has grown around 5X compared to a year ago and is adding approximately 1 million new users a week.

After reporting its Q2 2016 earnings earlier today, the company is now hosting its conference call where we’ll likely get some more insight and comments on the numbers from Apple execs. Head below for a roundup of all the numbers Apple announced today, and check back for more as we listen in on Apple’s call.

  • 51.1 million iPhones (that’s -36% sequential change for revenue and -18% year/year change)
  • 10.25 million iPads (that means revenue was down 38% sequentially and 19% year/year)
  • 4 million Macs (a -24% change sequentially for revenue and a -9% change over last year)
  • -Apple’s revenue was $50.6 billion (down 13% year over year and 33% from last quarter)
  • 13 million Apple Music subscribers (up from 11 million in February)
  • Highest Android switcher numbers of any 6th period
  • -Revenue in Greater China down 26% year over year, and -25% in rest of Asia Pacific, versus -10% and -5% drops in Americas and EU.
  • $50 billion increase to capital return program to total of $250 billion by end of March 2018
  • – Share repurchase authorization increased to $175 billion from $140 billion
  • -App Store revenue up 35%
  • -Unit sales of watch during first year exceeded iPhone first year
  • -Apple Pay is growth at more than 5X a year ago, adding 1 million new users a week
  • -record 9.9 billion in the quarter from services from iOS users
  • 15 acquisitions in last 4 quarters
  • -iPhone installed base up 80% since two years ago

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Comments

  1. taoprophet420 - 8 years ago

    Subtract China and I would like to see Apple Pay numbers.

  2. viciosodiego - 8 years ago

    If I was listening correctly, and I think I did, Luca said they expect mac sales to increase around june.

    New macbook pros.

    • Scott (@ScooterComputer) - 8 years ago

      I also heard that. Same thought. Would also be nice to see a Mac mini and Mac Pro update in time for WWDC, though that would be too late to affect next quarter’s numbers.

  3. viciosodiego - 8 years ago

    People who wanted the latest tech on the smaller iPhone were way more then we expected.

    Well tim, not everyone likes a big iPhone, the upgrade numbers should have told you as much.

    • rnc - 8 years ago

      Much less people likes a small iPhone!

      The 4.7″ is perfect for the masses. But yes, there a lot of people who want a smaller and a bigger model (like me).

    • taoprophet420 - 8 years ago

      I think price has to do with sales more then size.

    • Chris Cooper (@clcooper) - 8 years ago

      the upgrade numbers from when the 6 was released? I would say those sales numbers confirmed people wanted to large phone?

      • Robert - 8 years ago

        Many of those people “thought” they wanted a bigger phone and now after having experience the uncomfortability problems that come with it they want to go back.

  4. Jim Phong - 8 years ago

    “Apple’s revenue was $50.6 billion (down 13% year over year and 33% from last quarter)” “App Store revenue up 35%” This surely isn’t anything bad. But competitors and Wall Street thieves will spin this for months to steal money from Apple for sure.
    Tim Cook must allow the designers, programmers, engineers that Steve Jobs wanted at Apple to do their job. Tim Cook must stop saying no to them and let them do it right. If they want to deliver expensive all new technologies let them do it! The AppleTV4 should have been released to attack the console market but Tim Cook forced it to be slower and cheaper while Apple could have released it with an A8X SoC clocked at 3GHz, 8GB RAM, 256GB SSD and a discrete external PowerVR 100Watt card and obviously Apple should have paid software houses to get 200+ exclusive AAA launch titles.
    Apple has holographic display and tech patents. It is time for Apple to do it and do it right. They have the money to do it.
    Tim Cook is slowing Apple down.

    • Where do you get this from? Did Tim Cook tell you he personally told the engineers to do X or Y, or are you rehashing the same old tired Tim Cook is not Steve Jobs BS.

    • lcfbill - 8 years ago

      I agree that Apple’s current product line is in many respects a disappointment. The current Air form factor has had a long run but it is well behind the times. Not super light anymore and with a screen that is very poor indeed. I cannot recommend it to anyone at this point. The MacBook Pro line has not had a form factor update in four years come June. It needs an overhaul badly. Dads and Grads season is coming up fast.. The MacBook was just updated but it still does not offer a larger storage option, which is the main thing holding my wife back from upgrading. Sticking with the single USB-C port is really really foolish. One port may look elegant, but it forces you use ugly and inelegant dongles. And, I sure hope the iPhone 7 has great new features. However, the rumors make you worry that they are going to make few changes at precisely the time they needed to invest in large improvements. And whatever happened to the MacPro? Released in late 2013 and impervious to even the most marginal improvements since then. Why put out a pro level machine and then leave it to languish? If Apple sits there and keeps trying to protect its profit margins, it is going to lose customers. The iMac 5K is terrific. I just wish it weren’t held together with glue. This is a decidedly inelegant aspect of its design.
      When Steve was running things, Apple would sometimes lag the industry…. only to leapfrog them all and take the lead. I do not see those kind of bold strokes with Mr. Cook. I hope he proves my worries to be groundless in the coming months.

  5. applegetridofsimandjack - 8 years ago

    I’m not saying Apple would not have launched a new 4-inch phone if iPhone sales had kept growing year over year. But I DO know Apple announced a new iPhone for just 400$ as a reaction to the slowing iPhone sales. Apple would never have done this if iPhone sales hadn’t been down.

    • dcj001 - 8 years ago

      applegetridofsimandjack said:

      “But I DO know Apple announced a new iPhone for just 400$ as a reaction to the slowing iPhone sales. Apple would never have done this if iPhone sales hadn’t been down.”

      Apparently, you know very little.

      • Paul Weiss - 8 years ago

        I probably will get a iPhone 7, but seriously – the prices are getting too high.

    • Doug Aalseth - 8 years ago

      Except that it takes at least a year to design and engineer and prototype, and test, and ramp up production on a phone. Now they may have been clever enough in 201`4 to see “peak iPhone” coming, but I’m not sure about that. Persona;l;y I feel it was more likely they wanted to release three sizes last fall and the SE got held up for some reason and had to be delayed by six months.

      • applegetridofsimandjack - 8 years ago

        Dude the SE is just another iPhone 5S with brand new specs. The reason they could make it this cheap is because they didn’t have to speld a dime on R&D for iPhone SE.

    • wpcrumbley - 8 years ago

      I disagree. You don’t just wake up in the middle of the quarter and say oh no we have to release a cheaper phone. It takes time to contact all the suppliers and develop it. Even if the outside is the same shape it has all new internals that was designed to fit a larger phone. So when apple says they updated the se because the 4″ phone is still a really popular phone, it sounds very believable.

  6. Paul Weiss - 8 years ago

    Well Apple is really starting to charge a premium for their phones – mind you they are the best. As someone who likes to get a new phone every year, Apple will really have to try hard to convince me to buy a new iPhone this year over a new Nexus. Camera tech is plateauing now. Perceived UI speed is plateauing. Almost all aspects of a smartphone are now plateauing. On paper, sure one is a lot better than the other. Plus, I almost exclusively use Google apps and they are better on Android.

    • So glad to hear another “expert” from the 9to5Mac community assert that “smartphone tech is plateauing” for the 5th year running! Does your boss at your iPhone engineering job at Apple know that you participate in this forum?

  7. Jim Phong - 8 years ago

    The Nexus crap.. No! Nexus is not better at all! It is still the crappy Android thing. Google doesn’t care about quality. Whoever is telling that an Android Nexus is as good as an iPhone with iOS must either be on crack or paid to tell lies.

    • cdm283813 - 8 years ago

      The Nexus is a great phone for geeks. It’s not made to be sold in large quantities hence the reason why you don’t see them in stores. I love the fact that the Nexus is a clean device that is developer friendly at an attractive price point with many features. Not saying it’s the best phone but no phone is. There is no such thing as the perfect phone.
      The Nexus will never rival the iPhones and Galaxies of the world from a sales perspective but I don’t believe that was Google’s intention. I stopped hating on iOS and Android because I own both a iPhone 6S and Galaxy S7 with no complaints.

  8. robertsm76 - 8 years ago

    Did Tim mention how the new AppleTv was selling?

  9. Justin Williams - 8 years ago

    My initial thought is that the end of carrier subsidizing is going to have an impact on all cell phone manufactures across the board. More and more people are likely to rethink upgrading when you now have to spend an additional 20-40 dollars a month especially w/ the lack of any “must get” feature. Just a thought.

    • taoprophet420 - 8 years ago

      You don’t have to pay 20-40 extra dollars a month. On AT&T For example the. I think,y access fee for an iPhone on a next plan is $15 and under a traditional plan it’s $40 a month. The difference is now they show you are paying extra under a subsidy plan.

  10. tigerpork - 8 years ago

    When you put out a half baked apple tv and an ipad pro that shouldn’t be called a pro. Can’t you see why your revenue is declining Timmy?

  11. Grayson Mixon - 8 years ago

    Apple’s greatest product since the iPhone is adding a million users a week and growing at 500% a year? That’s spectacular news.

  12. pdixon1986 - 8 years ago

    sadly many might be switching over to android if apple are not careful with iphone 7…

    im on the fence about switching…i do know that i dont want the plus size – too big…not long now until i can downsize…

    • Robert - 8 years ago

      According to Tim the ‘switching momentum’ to Apple is at a record high. Also demand for the SE is more than they can supply.

      One questioner was asking why demand for the SE does not result in a stronger outlook for Q3? Tim’s answer was kind of fuzzy, seems like he’s concerned in the short term about overall slowdown in the industry and he doesn’t know when supply will catch up with demand for the SE. It looks like some SE sales will be lost or perhaps even pushed back to Q4.

      I think their outlook is extremely cautious, they have in fact taken Q2 decline an accelerated it! This was a huge surprise to me.

      • pdixon1986 - 8 years ago

        SE sales were up in china and india — they werent that high for places like america.

        In china and india many favor smaller phones – but they also favor cheaper phones.

        I’ve already known a few switch to android after been on iphone since iphone 4… and i know others considering the switch to either android or just get the SE and skip iphone 7 — i think i may fall into the latter come september… save money by getting the SE and skip iphone 7 — i hate the 6 plus design, so if iphone 7 is similar then i know i will hate it…the apple eco system is the only thing keeping me for the most part :-(

  13. Jack Smith - 8 years ago

    “Highest Android switcher numbers of any 6th period” This honestly does NOT mean anything without the other side of the equation and could be implying something that is NOT true.

    If you think about it we have Android with over 80% share and iPhone with something around 15% globally. With these numbers you would expect a record number of Android people to switch to iPhone and would also expect a record number of iPhone switch to Android every quarter.

    There are more and more people with phones so more and more people will switch. It in itself does NOT mean anything. It does bother me that TC keeps repeating as I do NOT feel it is being honest.

    Also, how in the world can 9To5Mac not have the ability to use your Google account to post. They even include Twitter as an option. It is the same protocol so we are basically talking one line in a configuration file.

Author

Avatar for Jordan Kahn Jordan Kahn

Jordan writes about all things Apple as Senior Editor of 9to5Mac, & contributes to 9to5Google, 9to5Toys, & Electrek.co. He also co-authors 9to5Mac’s Logic Pros series.