Apple Inc.’s (NASDAQ: AAPL) disappointing earnings proved that the company’s run as a growth stock is over for now. Quarterly revenue dropped 4% year over year to $90.8 billion. Earnings were flat at $1.53 per share.
Investors were particularly disappointed by the decline in iPhone revenue, from $50.3 billion to $46.0 billion. Another smaller division also had a poor quarter. Revenue in the Wearables and Home Division dropped from $8.6 billion to $7.9 billion.
“Wearables” include the Apple Watch, iPods, and Air Tags. To some extent, these are tied to iPhone sales. They mostly work with the iPhone, though the Apple Watch is a standalone product when configured separately. When the Apple Watch was launched in April 2015, it was supposed to be another Apple “breakthrough” product. It was newer than the iPhone, iPad, and Mac. It comes in several sizes and colors and is sold at price points from $249 to $1,249.
Did the Apple Watch fail to catch on? Apple does not break out figures. Perhaps slow iPhone sales pulled down its smartwatch sales as well. Perhaps it is too niche a product. Or perhaps the slow sales are because of several competitors, particularly from Garmin, Coros, Polar, Samsung, and Google.
One thing is for certain. There is no product to save Apple other than the iPhone. The Apple Watch joins other products that did poorly last quarter. And none of them has shown enough growth in the previous several years to be an engine to help the entire company.
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