Apple have presented a disappointing set of figures. Revenue from the iPhone, the single device that accounts for most of the company’s profits, fell 15 percent in its latest financial quarter. Across the board, revenue was down five percent from a year ago to about $84.3 billion, meaning Apple is no longer a trillion dollar company. The area of weakest growth is in China, especially with the proportion of people seeking to upgrade their iPhones being lower than anticipated.
Apple CEO Tim Cook has signaled that Apple may need to lower the price of the iPhone in order to remain competitive. The firm is also investing in areas like music streaming and digital television services, as alternative ways to raise profits.
Commenting on Apple’s first-quarter earnings Investing.com Senior Analyst, Haris Anwar, has explained to Digital Journal the key trends behind the latest sales data.
The first area is about the iPhone. Anwar states: “For Apple bears, the current environment highlights the fundamental challenge the company is facing in its next stage of growth: convincing customers that they should pay more for iPhones.”
The dilemma here, the analyst adds is that this is occurring “at a time when the smartphone industry has hit a peak and cheaper phones are flooding the market.”
The second aspect framing Apple’s data is the Chinese marketplace. Anwar notes: “As for the Chinese marketplace, Apple has a history of overcoming challenges in that tough arena.
“However, there is mood to be optimistic: They’ve always found way to boost sales in that market. Though sales there dropped in both fiscal 2016 and 2017, overall, the company continued its upward trajectory.”
There are also other territories to focus on, like India. Anwar says: “And there’s another, potentially major growth driver for Apple: India. The subcontinent remains the biggest, untapped smartphone market for the company; iPhones account for just 1 percent of overall smartphone sales in the region.”
The share price dip should not be seen as an indication that Apple are in major trouble, Anwar adds: “Apple remains a leader in innovation in the smartphone industry.”
Furthermore, he sees the future as still looking bright for an innovator like Apple: “If the industry is up for any fundamental change, it will be Apple that has the power and financial muscles to quickly adjust to any new reality.”
