End of an era: Apple’s iPhone growth is over.
27 January 2016 3:55 pm
Apple’s iPhone sales grew at the slowest pace since its introduction in 2007 and the company has forecast that revenue in the current quarter will decline at the steepest rate in 15 years,
According to Bloomberg, it’s all adding to evidence that the market for smartphones is becoming saturated and threatening the company’s unprecedented run of success.
This is a problem for Apple because iPhone sales account for roughly two-thirds of Apple’s revenue. And that raises questions about Apple’s growth. Sales of the iPad have been falling for two years, and sales of Mac computers, a recent area of strength, fell in the most recent quarter. Apple has struggled to get a highly anticipated streaming TV service off the ground. It is working on an electric car, but that project is years away, and its leader is leaving the company.
In an interview with The Wall Street Journal, Apple Chief Executive Tim Cook makes it clear he is counting on future gains for the iPad, continued growth from services such as Apple Music and other projects.
“We don’t live in 90-day quarters, and we don’t invest in 90-day quarters,” said Mr. Cook. “I’m so convinced that the things we are doing is right and the assets we have are enormous.”
But will that be enough? In a conference with analysts, Cook acknowledged there was a problem with China.
Perhaps it was always going to happen. And the next batch of iPhones are unlikely to change that. As Gizmodo points out, the top five uses for smartphones are now text messaging, voice/video calling, internet, email, and social networking. You don’t really need more powerful processors for any of those things.
Now that the first iPhone revenue decline is likely to increase, the pressure will be on Apple to staunch the bleeding.
All they can do is produce another product that can raise expectations once more. Watch this space