Low iPhone Sales Pull Apple’s Stock Down, Tim Cook Has High Hopes For iPhone 12

Amid a strong fourth-quarter earnings report, Apple's iPhone sales fell by a fifth as compared to the year-ago period, which dragged the company’s stock down by 4% Thursday.

While the overall earnings exceeded Wall Street’s expectations, iPhone revenue dropped 20.7%, at $26.44 billion, posing bad news for the company. On the other hand, iPad and Mac revenue saw a healthy increase of 46% and 28% year-on-year respectively, on the back of increased work-from-home trends during the coronavirus pandemic.

Apple's overall revenue was up 1% from a year ago, at $64.7 billion.

The company gave no guidance to investors for the quarter ending December, with no projected sales performance on the new iPhone 12, which was launched earlier in October. Apple has refrained from giving investors any information in the last two quarters due to uncertainty caused by the COVID-19 pandemic.

However, Apple CEO Tim Cook told CNBC that he is optimistic about iPhone 12 sales because of 5G support, extra promotions coming from the telecom companies, and a loyal install base. The “initial data points are really quite good,” Cook told CNBC. It was reported that carrier collaborations and offers were more for iPhone 12 than on any other previous model's launch day.

In the global markets, China was a weak point for the iPhone maker as sales in the country, including regions of Hong Kong and Taiwan, saw a whopping 28% decrease, from $11.13 billion to $7.95 billion.

“A larger percentage of China revenue is made up of new iPhones. And so that is the reason the number for the total quarter started with a minus sign,” the report quoted Cook as saying.

After the disappointing iPhone sales in Q4, the company has eyes on iPhone 12 and the business it brings in for the company in the coming year. On the slow pace of 5G construction in the U.S., Cook brushed off the concerns saying Apple was entering the markets at the right time.

Apple’s revenue from services businesses like iCloud and Apple Music was up by 16% year-on-year. Cook kept investors and fans hooked by saying that the year was not up for Apple yet and there are few more exciting things in store.