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The iPhone has been Apple’s main moneymaker for quite some time now, and the Cupertino-based company has all along been riding the revenue wave. Well, all good things come to an end, do they not? No company is capable of infinite growth, no matter how powerful they may seem, and Apple is unfortunately experiencing the aforementioned cliché at this very moment.
Apple Inc. reports that for the first time since the original iPhone was introduced, all the way back in 2007, that the device has officially fallen into a sales slump. Revenue has plunged for the second quarter in a row, meaning that the head honchos at Apple HQ are most likely experiencing aggressive, prolonged panic attacks.
The Wall Street Journal reports “Apple said net income was $7.8 billion in the fiscal third quarter that ended June 25, down from $10.68 billion in the year-ago period. Earnings per share fell to $1.42 from $1.85. Revenue declined 14.6% to $42.36 billion from $49.6 billion a year earlier…Shares rose 4.6% to $101.30 in after-hours trading as results beat expectations. Analysts polled by Thomson Reuters estimated that Apple would post earnings of $1.38 a share on revenue of $42.1 billion.”
And all along, there might be nothing Apple could do at this moment to revive the sales slump. It has become common knowledge that technology growth, especially in the smartphone industry, has slowed tremendously.
Wow-factor has generally disappeared as smartphone manufacturers are struggling to come up with “the next big thing.” Sure, incremental upgrades are nice, however the death of the two-year contract means average consumers are now required to drop fat sums of money for new smartphones, ranging between $600 and $1000 a pop for a top-of-the-line device. Average consumers are unwilling to spend $600 for an “incremental update”, and market activity has proven that.
The new 4” iPhone SE (which is essentially an iPhone 5s stuffed with iPhone 6s goodies) is actually selling well at $399, indicating that consumers might not be as obsessed with “flagship smartphones” as they once were, instead settling for a device that suits their needs and their budget.
While iPhone (and iPad) sales are decreasing, it surely doesn’t indicate any sort inevitable demise for the company. Fluctuations in the market are unavoidable, however with innovation comes excitement, and it might take a completely redesigned iPhone 8 with some actual wow-factor (hint, hint) to send Apple’s revenue soaring sky-high once again.
Why do you think Apple’s iPhone sales are slowing? Is it Apple’s fault or is this all just a part of the economic game? Let us know in the comments below!