Apple’s Sales Are Still Declining, But There’s a Silver Lining

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Apple has had finer earnings reports than the one it released Tuesday.

Sales are declining, and analysts aren’t impressed with the company’s projected return to growth: Extra days in the coming quarter lower the bar. CEO Tim Cook also is characteristically mum on Apple’s next big thing. Cars, TVs, and large-scale content generation are interesting, but specifics are in short supply.

Speaking of supply, there was a silver lining in the details of Apple’s report. Cook repeatedly said Apple (AAPL) was having trouble satisfying demand for its newest phones, particularly the oversized iPhone 7 Plus. Reading between the lines, Apple appears to be having trouble achieving the kind of manufacturing yields it needs to produce the phones in sufficient volume.

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“We’ve seen this before,” says veteran analyst Gene Munster of Piper Jaffray. “Historically this is how they’ve talked about production problems, to say they’re supply constrained.”

At a time archfoe Samsung’s competing product is no longer for sale, Apple’s needing to work out the kinks of a new phone—specifically its advanced camera—is unfortunate but not the worst-case scenario. It is evidence that Apple’s quality-control process in intact. Low yields, after all, trump exploding phones.

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