Apple Inc’s iPhone Sales Dying Down

apple stock, apple shares, technology company,

The technology giant need to up its game as people are not interested in buying and upgrading their iPhones anymore.

Apple Inc. has released its first quarter of fiscal year 2016 financial report. For the longest time, the iPhone has been the reason why the technology company has always been able to report profits. Presently, according to the earning’s report, even for the latest quarter; profits have been reported due to the iPhone but it can be observed that the love for the flagship device is now dying down amongst the once regulars.

According to the earnings report, the company has managed to beat the last year’s profits of $18 billion as it reports profits of $18.4 billion. However, it managed to underperform the expectations of the analysts at Wall Street as it posts iPhone sales units of 74.8 million while in the same quarter in the previous year it sold over 74.5 million units of the device. In financial terms, this shows a year over year growth of just 1%.

IPhone accounts for as much as two thirds of the company’s revenue but at this point the management of the Silicon Valley giant has admitted that in the future this slow growth is likely to happen. The 1% year over year growth in unit sales is a first ever for the company. The chief executive officer, Tim Cook of the giant blames the slow growth on the ‘strength of the dollar’ and ‘global recession’, according to Bidness Etc. He said during the earnings conference call that the company has been seeing extreme conditions all around; something that they have never witnessed before.

We believe that the this low growth is mainly due to in the slow growth and the economy crisis in China and secondly iPhone users had a different perspective of iPhone 6 and 6S in mind – which was released back in September 2015. He thought that the device will have massive changes in features but unfortunately it seemed to be quite similar to the iPhone 5 and hence was not convincing enough for the users to upgrade their smartphones.

It is against the norms of the company to reveal the iPhone sales estimates of the subsequent quarter but this time Tim Cook did just that on Tuesday. He still believes that there is massive growth potential as there are emerging markets that the tech organization needs to tap. Additionally, to tackle the question on the saturation of the company’s smartphone market; the CEO stated that most of the Chinese consumer who bought the product were first time smartphone buyers. On this he added that because of this reason he believes that there are still a huge number of people who will be the first to buy smartphones and that is the market share the company will work on getting.

Mr. Cook informed on the conference call that most of the huge sales were being generated from the Chinese regions but the future growth of these regions seems a little uncertain. For the upcoming month of March, the smartphone maker is estimating revenue of $50 to $53 billion – these figures show a drop in the revenue in comparison to the same quarter in the previous year. Everyone had hoped that the other products in the Apple product line might be able to revive the declining sales, but unfortunately they failed to do so but the Apple Watch has shown promising results for the quarter.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s