Marking a rare stumble, Apple Inc. on Friday revealed it missed its own annual sales and profit goals for the first time since 2009, putting a dent in Chief Executive Tim Cook’s annual paycheck and pressuring the company to deliver a blockbuster with its next iPhone.
Apple fell short of its own projections in part because it mistakenly assumed consumers’ appetite for the iPhone 6S, introduced in 2015, would outpace demand for the predecessor device. The Apple Watch, introduced in 2015, and services including Apple Music, iTunes and the App Store haven’t been able to offset the iPhone’s decline.
Sales volume of the iPhone fell in fiscal 2016 for the first time since the device was introduced in 2007, and Apple posted its first annual revenue decline in 15 years.
A sharp slowdown in China sales in particular cut into total revenue.
The slump took a 15% bite out of Mr. Cook’s total annual compensation, which Apple said Friday declined for the first time since he assumed leadership of the company in 2011. His compensation is partly tied to Apple’s financial performance.
Apple now is pinning hopes on the iPhone 7, which came out in September, and forthcoming versions, including an expected 10th-anniversary iPhone in the fall. Mr. Cook said in October that demand for the iPhone 7 and the bigger 7 Plus, which feature enhanced cameras and longer battery life, have outpaced supply. Apple won’t reveal quarterly sales for those phones until Jan. 31.