Apple shares were sent reeling Thursday on word of a steep drop in sales of iPhones, which are
at the heart of the tech titan’s money-making engine.

Apple profit fell 7 per cent to $12.7 billion in the recently ended quarter, the Silicon Valley-
based colossus said in its earnings release.

The California tech giant’s total revenue edged up from last year’s level to $64.7 billion in the
fiscal fourth quarter, but revenue from iPhone sales — the major income driver for Apple — slid
some 20 per cent from a year ago, unsettling investors.

The company’s share price nosedived more than four per cent in after-hours trading.

“iPhone is the cash cow and the driver of pretty much every add-on service Apple has out
there,” said analyst Patrick Moorhead of Moor Insights and Strategy.

“Everything is tied to that.”
Apple has made a priority of selling apps, games, subscriptions and music to iPhone users in
recent years to break its dependence on handset sales.

From Apple TV and the App Store to Apple Watch and AirPod earbuds, the company’s other
offerings are aimed at iPhone users, Moorhead noted.

“I expect Apple in the next quarter to have a nice big surge due to the new models, and also the
financing or new phones with monthly plans,” Moorhead said.

Freshly-launched iPhone 12 models include some tailored for ultra-fast 5G networks.

“Apple capped off a fiscal year defined by innovation in the face of adversity with a September
quarter record, led by all-time records for Mac and Services,” Apple chief executive Tim Cook
said in a statement.

Cook added that early response to the company’s first 5G-enabled iPhone lineup has been
“tremendously positive”

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Delayed iPhone 12 sales meant that the fiscal Q4 earnings Apple reported yesterday were massively better than the headline number suggested.

Apple reported revenue of $64.7B, making it flat against the $64B the company brought in during the same quarter last year. But the delayed availability of this year’s flagship iPhones mean that the two quarters are not remotely comparable …