Apple's iPhone revenue down 15% in holiday quarter

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This anecdote illustrates why U.S. manufacturing is so tough for Apple

In the December quarter, Apple's iPhone revenue declined 15 percent year over year to US$51.9 billion.

"We've chose to go back to (iPhone prices) more commensurate with what our local prices were a year ago, in hopes of helping the sales in those areas", Cook told Reuters in an interview.

Apple's iPhone revenue has plunged in the December quarter, and the company is ready to make some changes.

Chief Executive Officer Tim Cook has seen China as a key part of Apple's sales and manufacturing strategy, with the company generating nearly $52 billion in revenue from China and Hong Kong last fiscal year.

However, Apple said its total revenue from all other products and services grew 19 percent, with services revenue from Apple Pay, Apple Music and iCloud storage hitting an all-time high of 10.9 billion dollars, up 19 percent over the prior year.

As for Apple's plans for video, Cook said the company participates there in a variety of ways, including through Apple TV. It was a clear sign to investors that Apple did not expect its iPhones sales to bring good news moving forward, and that it wanted to shift the focus elsewhere.

"We've chose to go back to (iPhone prices) more commensurate with what our local prices were a year ago, in hopes of helping the sales in those areas", Cook told Reuters in an interview.

Apple's net profit in fiscal Q1 2019 declined to $19.97 billion from $20.07 billion in the same quarter a year ago.

Cook used the tightening of local regulations in Japan to demonstrate his point about carriers being restricted in subsidising iPhone sales as part of a services contract. The costs of the iPhone XR and the other two devices won't likely rise substantially this year, especially considering less-than-expected sales of iPhones in China in 2018.

On Monday, Apple said it was aware of the issue and disabled FaceTime's group call function - but not before a lawyer filed suit over someone who'd allegedly been able to eavesdrop on one of his depositions by exploiting the bug. It said it now has 1.4 billion active devices, an increase of 100 million from previous year, and that 900 million of those are iPhones.

Still, the iPhone remains the centerpiece of Apple's product lineup, so some analysts remain disappointed by the company's performance in a crucial market for growth.

Customers leave the Apple store in the Brooklyn borough of New York, Jan. 3, 2019.

"We can expect some kind of price correction going forward as Apple has given indications that they will look at pricing outside the U.S. closely now", Tarun Pathak, Associate Director at Counterpoint, told IANS.

In prepared statements, Cook referenced the January 2 letter he sent to shareholders signaling Apple's revenue for the quarter would be lower than originally guided. The new iPhones will reportedly also include a new chipset, as well as improvements to the company's FaceID authentication feature.

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