Decline in iPhone Sales, First Since 2003


BENGALURU: Earlier this week, the Cupertino-based tech giant, Apple revealed their first-ever decline in iPhone sales. The company also stated it is the first revenue drop since 2003, reports TOI.

In China, Apple’s sales plunged by more than a quarter, its most important market followed by the U.S. The firm’s shares fell almost close to 8 percent that is below $100 for the first time since February.

Along with Apple’s down fall in quarterly profits, Microsoft, Alphabet Inc and Twitter also shared their misfortune in their profits. According to Apple’s statistics, in second fiscal quarter, it sold only 51.2 million iPhones—10 million units less than same quarter a year ago.

“Apple needs to come up with a radical new innovation or product rather than just the current incremental improvements to existing products. This is the only way in which it will reinvigorate sales growth,” said Neil Saunders, Chief Executive of Conlumino, a research firm.

The Apple Chief Financial Officer, Luca Maestri stated in one of his interview with Reuters that the difficult bar was set higher with the success of iPhone 6 in the previous year. “The iPhone 6 is an anomaly,” he added.

According to Apple’s Chief Executive, Tim Cook, the iPhone 6s did not move the crowd to switch their iPhone from iPhone 6 whereas, in the previous year, majority of the people switched to iPhone 6 from iPhone 5s. “I don't mean just a hair lower; it's a lot lower,” he stated. “If we'd had the same rate on 6S as 6, it would be time for a huge party.”

Despite the dip in iPhone sales, the company’s services division such as Apple Music and the App Store saw the 20 percent growth which is considered to be better than sales statistics of company’s iMacs and iPads. Cook spilled some beans on their future offering by saying, “The future of Apple is very bright. Our product pipeline has amazing innovations in store.”

“The global smartphone market is slowing as penetration of smartphones in major mature markets reaches saturation, and even markets like China start to see slower growth,” says Jan Dawson, President at Jackdaw Research.

Although, the company launched iPhone 5SE in March,  the sales were not recorded for the past quarter. Looking at the bounce back opportunity, Maestri said, “The situation right now around the world is that we are supply-constrained,” he added. “The demand has been very, very strong.”

However, Apple’s revenue plunged heavily by 26 percent in China from the quarter in previous year, Maestri said that the company was “extremely optimistic” about China. “We continue to make a lot of investment there,” he concluded.

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