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How Did Apple Perform in 2016?

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Jan. 4 2017, Published 7:33 p.m. ET

Apple stock rose 11.8% in 2016

US-based technology (QQQ) heavyweight Apple (AAPL) rose 11.8% in 2016 after having fallen 3% in 2015. Apple generated over $200 billion in revenue between 4Q15 and 3Q16. In Apple’s 4Q16, which ended September 2016, the firm reported revenue of $46.9 billion, a YoY (year-over-year) decline of 8.9% compared to revenue of $51.5 billion in fiscal 4Q15. Peers Hewlett-Packard (HPQ), Western Digital (WDC), and Seagate (STX) have risen 30%, 17.5%, and 13.4%, respectively, in 2016.

Apple’s gross profit margin and operating margin narrowed by 180 basis points and 310 basis points, respectively. Its net income and EPS (earnings per share) fell to $9.0 billion and $1.67, respectively, in fiscal 4Q16 as compared to $11.1 billion and $1.96, respectively, in fiscal 4Q15.

In fiscal 2016, AAPL reported net sales of $215.6 billion, which represents a YoY fall of 7.7%. Its net income and EPS fell to $45.7 billion and $8.31, respectively, in fiscal 2016, as compared to $53.4 billion and $9.22, respectively, in fiscal 2015.

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Slowing smartphone market affected Apple revenues

According to IDC (International Data Corporation), a market research firm, smartphone shipments are expected to rise at a rate of less than 1.0% YoY (year-over-year) in 2016. Smartphone shipments rose 10.4% YoY in 2015. Total shipments are projected to reach ~1.5 billion in 2016, representing a YoY rise of 0.60%.

IDC said that 4G (fourth-generation) smartphone shipments are expected to rise 21.3% YoY to ~1.2 billion units from 967.0 million units in 2015. Growing demand from emerging markets such as Asia, Latin America, and the Middle East are expected to drive 4G smartphone shipments.

Apple’s flagship product is the iPhone and it accounts for approximately 58% of total revenue. A slowing smartphone market will directly affect Apple’s revenues as well.

The next few articles will look at products that Apple launched last year.

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