Apple’s Slump Means We Could See Cheaper iPhones

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When Apple said that it would no longer be reporting iPhone sales figures and warned that sales in China were slowing, it prepared investors for poor results – and that’s precisely what Apple has now delivered.

Revenue generated by the iPhone family, which remains responsible for most of the company’s profits these days, tumbled 15 percent in its latest financial quarter. Meanwhile, overall revenue dropped 5 percent compared to last year, to $84.3bn.

The impact of sluggish sales in China will certainly have had an effect, but Apple has also pointed out that the strong dollar is slowing down sales in some parts of the west, too, as well as emerging markets.

To combat this, Apple boss Tim Cook has revealed that the company is looking to reduce the price of some iPhone models in certain regions. “What we have done in January in some locations and [for] some products is essentially absorb part or all of the foreign currency move as compared to last year,” he said.

When Apple announced last year that it would not be posting iPhone sales numbers it caused alarm bells, so the recent bad news has been received perhaps better than it might have been; it was known to be on the way, at least.

It also comes at a time when the whole smartphone sector is struggling, with sales slowing down as consumers become disenchanted by phones which, on the surface, appear to be little different from their existing model. The market is hoping that folding phones and 5G will overcome this problem.

This was Apple’s worst quarter in some time, with sales revenue dropping 25 percent in China, a catastrophic fall-off. In Europe, the slump was less dramatic, but sales still shrank by 3 percent.

However, on the upside, sales in America rose by 5 percent, and the company’s ‘services’ business also leapt by almost 20 percent.

Apple still has $245bn in the bank, so there’s nothing to panic about quite yet; indeed, Apple’s shares gained 4 percent earlier this week following the news, so it would seem that investors still have plenty of faith in the company.

2019 could prove to be difficult, however. It’s already being hinted that the 2019 iPhone won’t have 5G support, and Apple is traditionally a little behind its Android-based rivals when it comes to embracing new tech, such as folding screens. Should the idea of a folding, 5G-ready smartphone be 2019’s big seller, Apple could endure another year of falling profits before it comes out the other side in 2020.

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