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Tech Lab

Apple’s dark day: What it means

An Apple iPhone 6.

Kai Pfaffenbach/REUTERS/File Photo

An Apple iPhone 6.

For 52 consecutive quarters Apple’s growth went in only one direction: up. Now that impressive streak is over, broken by a second-quarter performance in which the tech titan reported revenues falling 13 percent from the previous period.

Though Apple still raked in nearly $51 billion in sales, the earnings report laid bare several important truths about a company that once seemed invincible:

iPhone: The thrill is gone

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The iPhone generates nearly 70 percent of Apple’s revenues. Its success made the company a global titan. But the product’s inevitable decline has left Apple dangerously overexposed.

When China sneezes....

The slowdown in the world’s second-largest economy is taking a heavy toll on Apple, which derives about a quarter of its revenue there. Apple’s sales in China dropped 26 percent. And China’s recent order barring Apple from selling electronic books and digital movies could make matters worse.

Tablets are no miracle cure

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The popularity of Apple’s iPad tablets stunned the industry when they were introduced six years ago. But sales have fallen as consumers welcome cheaper tablets. It’s doubtful whether the recent release of a new, smaller iPad Pro will make much difference.

No immunity for Mac

The global slump in personal computer sales isn’t just afflicting makers of Windows-based machines. Sales of Apple’s Mac computers fell nearly 12 percent, as consumers and businesses find they can make do with older machines.

And one more thing...

Despite its recent travails, Apple’s got more cash than it knows what to do with. So it soothed investors by jacking up its dividend to 57 cents a share and vowing to buy up $175 billion of the company’s own shares.

Hiawatha Bray can be reached at hiawatha.bray@globe.com. Follow him on Twitter @GlobeTechLab.
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