Apple just made more money than it ever has, but there's one problem

iPhone sales are stalling

Apple posted $18.4 billion in profit last quarter, the biggest quarterly earnings by a company ever, but there's one problem.

iPhone sales were basically flat year-on-year: 74.8 million units sold in Q1 2016 while 74.4 million were moved in Q1 2015. It's the slowest sales growth since the iPhone first came out in 2007. iPhone revenue was up a meager 1% YoY.

Even though the iPhone is still Apple's biggest revenue driver by a large margin, this indicates sales of Apple's golden goose are slowing, and it could spell trouble for the company moving forward.

iPads aren't faring well either, despite the release of the iPad Pro. Apple sold just over 16 million iPads in Q1 2016, down 25% from Q1 2015. Mac unit sales, meanwhile, were down 4% YoY.

There were a few bright spots, however. Apple's "Other Product" category, which includes Apple TV, Apple Watch, Beats products, iPod and Apple-branded and third-party accessories, posted a sizable jump in YoY revenue, up 62% over Q1 2015. Revenue in Services, which include things like Apple Pay, AppleCare and internet services, was up 26%.

Growth in these areas is a positive for Apple, but the revenue generated pale in comparison to iPhone. And while it was apparently a record quarter in Apple Watch sales, Cupertino still didn't divulge how many units it sold.

Coming off a huge quarter last year for the iPhone 6 and iPhone 6 Plus, it's not surprising Apple didn't see more growth for what were essentially incremental updates to the phones in the iPhone 6S and 6S Plus. It puts all the more pressure on Apple to deliver with the iPhone 7, however, before investors get really antsy.

Looking ahead, Apple expects revenue to be down for this quarter, a first for the company in over 10 years, earning somewhere between $50 million and $53 million.



News Editor (US)

As the US News Editor, Michelle (Twitter, Google+) keeps her eye on all things tech with particular interest on phones, tablets and finding out who the people are behind the devices. Any phone that can survive a regular (accidental) drop has her vote for best handset. Michelle previously worked covering local news in the Bay Area and has been with TechRadar since July 2012.