Everybody knows that Apple gets most of its revenues from sales of its iPhone devices. As a matter of fact, iPhones make up two thirds of the tech giant’s total earnings. Accordingly, the profits the company posts every quarter is directly and significantly affected by how many iPhone units it has managed to ship around the world. Sure, Apple has started to diversify its products and services in the last few years -- introducing a wearable device (the Apple Watch, its first and only smartwatch to date), expanding its lineup of tablet devices, and even offering a music streaming subscription service (Apple Music). But the iPhone remains the company’s most reliable cash cow.
Since Apple first introduced the iPhone back in 2007 about eight years ago, the company has enjoyed ever increasing demand for its smartphone offering. But what if the consistently growing demand for device begins to slow down?
Apple may have to start dealing with that notion because various reports indicate that when the company will be releasing its fiscal first quarter results (for the months October, November, and December of last year) this week, we may be seeing a slowdown of iPhone sales -- the first ever in Apple’s history.
For quite some time, it looked like Apple was exempt from the law of diminishing return. Year after year, after all, the company always managed to draw long queues of people eager to purchase its latest iPhone model. But recently, iPhone fatigue may finally be starting to happen. Of course, one cannot discount the fact that the global smartphone market is in the midst of a slump right now, which means that it is not just iPhones suffering now, it applies to all smartphones. Perhaps it is not just iPhone fatigue, but smartphone fatigue in general.
In Apple’s case, the strong sales of its two previous iPhone offerings may have set the bar too high. Last year alone, the company registered the highest profit ever of any public company, thanks to the huge popularity of the iPhone 6 and the iPhone 6 Plus, which featured larger than usual display screens, that is by iPhone standards at that time -- the latest iPhone models, the iPhone 6s and the iPhone 6s Plus both also feature big display screens.
And speaking of the iPhone 6s and the iPhone 6s Plus -- they sold extremely well across the globe, but many industry watchers agree that both devices did not have enough new features to convince iOS users from major smartphone markets to upgrade to the newest iPhone model. As for China, currently the biggest market for smartphones in the world right now, is also experiencing its own slump, which will certainly impact Apple’s sales numbers for iPhones this year.
Perhaps it was bound to happen eventually, but if this really marks a new chapter in Apple’s smartphone history, it should still be interesting to observe how the company handles the situation, and maybe, just maybe, this slowdown may just motivate the tech giant to wow us for its next generation of iPhone devices.
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