Apple is arguably the most profitable company in the world and a tech giant. The whole changing-the-mobile-industry campaign started in 2007 with the iPhone (1st generation). Sales were through the roof and everything was good; well, until people didn’t buy iPhones as much as they used to before. There are a number of reasons for this; I’ll be as well-rounded as possible but pardon me if I miss anything (that’s what the comments section are for):
- Pricing: Apple is known to make insane profits(usually 100% or more) from the production and sale of one device. You might say: hey, what about Samsung and other OEMs? They make expensive devices too. Well, Apple realised they were making super expensive phones which were like years behind in the software department (correct me if I’m wrong); then they decided to make a less expensive and smaller device: The iPhone SE. Now this device packs almost all the specs in a 6S yet costs about half. If they could pull something like this off all along: great specs and reasonable pricing, why didn’t they do so all along?!
- People don’t see a reason to upgrade: Let’s say you have an iPhone 5S then Apple released the 6 series, what real reason would you have to switch? Bigger screen? Well that just means more slippery. Fingerprint scanner? there are less expensive devices that offer that. Force touch? Developers haven’t really taken advantage of it yet, so for now, it’s more or less a gimmick. Plus it’s coming to Android soon!
Now for the numbers
Even Tim Cook and his team predicted this in January; they said iPhone sales might see a reasonable drop in the next three months(which ended in March) since the debut in 2007. This prediction was right as analysts expected Apple to sell about 51 million iPhones in those three months and against the 62.1 million units sold in the first three months of 2015(they call it the first quarter). That’s about 20% decline.
The General Implications for Apple Corp.
Two-thirds of Apple’s revenue comes from the sales of iPhones and if this drops, “analysts” say Apple’s revenue might drop by 3%. Their predictions go thus:
In the second quarter, revenue could drop about 10% to $52 million and drop another 4% in the third quarter. So, in essence, at the end of June 2016, Apple’s revenue should be about $47.4 million.
In my opinion, Apple should put their hopes and a lot of hard work into the iPhone 7 and keep their fingers crossed for a better 2017.
