Components shortage dents Apple's Mac sales

Firm's iPhone once again the key contributor to overall revenue drop

Apple has reported a revenue decline in its second quarter as the processor shortage left a hole in its Mac sales.

For the three months ending 30 March 2019 the Cupertino-based vendor saw a sales drop of five per cent, to $58bn (£44.4bn).

Apple said it saw positive quarters in a number of areas including services, iPad and wearables.

Overall revenue was towards the high end of guidance, it said, following a disappointing Q1 which was announced at the start of the year.

Apple CEO Tim Cook said: "Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for services; and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record.

"We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software and services."

IPhone sales were down 17 per cent to $31bn, but Cook said declines were "significantly smaller in the final weeks of the March quarter".

Apple's iPad revenue grew 22 per cent year on year to $4.9bn, the vendor said.

Apple added that the growth was a result of good sales of the iPad Pro, while the new iPad Air and iPad Mini both launched towards the end of the quarter.

Mac sales were however hampered by the ongoing components shortage, with revenue dropping to $5.5bn.

On an earnings call, transcribed by Seeking Alpha, Cook said: "For our Mac business overall, we faced some processor constraints in the March quarter leading to a five per cent revenue decline compared with last year.

"But we believe that our Mac revenue would have been up compared with last year without those constraints and don't believe this challenge will have a significant impact on our Q3 results."

Cook also addressed Apple's recent ceasefire in its long battle with Qualcomm, amid rumours that the vendor has shelved a potential 5G relationship with Intel after the truce was called. Intel then said it would not be foraging into the 5G smartphone modem market.

The CEO declined to comment on Apple's 5G strategy when asked, opting to "largely punt" the questions.

Cook said: "We're glad to put the litigation behind us, and all the litigation around the world has been dismissed and settled.

"We're very happy to have a multi-year supply agreement and we're happy that we have a direct licence arrangement with Qualcomm, which I know was important for both companies, and so we feel good about the resolution."