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Jon Erlichman

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Apple reports third quarter earnings after market’s close on Tuesday.  While the Dow Jones Industrial Average has risen roughly 6.5 per cent this year, Apple’s stock has lost more than 6 per cent of its value in 2016. Growth concerns top the list of investor worries.  Here are five percentages that help explain the company’s growth dilemma:

1) 17%

That’s how much Apple’s third quarter revenue could decline, compared to the same period last year. In April, Apple told investors it expected to generate third quarter revenue of between US$41 - $43 billion.  As impressive as that number would be compared to most businesses, Apple generated nearly US$50 billion in the third quarter of 2015.

2) 63%

That’s how much of Apple’s third quarter revenue last year was tied directly to iPhone sales. Apple sold 47.5 million iPhones in the third quarter of 2015.  Comparatively, analysts expect sales of Apple’s most popular device to be closer to 40 million in the third quarter of 2016. 

3) 18% 

That’s how much Apple’s iPad unit sales declined in the third quarter of 2015.  As iPhone sales slump, Apple’s non-iPhone businesses have struggled to pick up the slack. iPad sales made up 9 per cent of Apple’s total revenue in last year’s third quarter.  Mac sales, comparatively, made up 12 per cent of Apple’s revenue.

4) 38% 

Apple had forecast its third quarter gross margin to be between 37.5 and 38 per cent.  Apple’s reluctance to discount product prices has previously helped pump up profits.  As it seeks more smartphone market share, cheaper iPhones like the SE have put pressure on margins.  By comparison, Apple’s third quarter gross margin in the third quarter of 2012 was 42.8 per cent.

5) 20%

New research from Chinese search giant Baidu suggests Apple’s third quarter revenue in China could decline 20 per cent from last year.  That would be a setback, considering the incredible growth Apple has enjoyed in the region.  Apple’s third quarter revenue from Greater China topped US$13 billion last year, up from less than US$5 billion in the same period in 2013.