Companies aren’t as invincible as they may seem, and today we found out that the iPhone’s rock solid foundations may be getting a bit shaky. The technology company has reported that the rapid growth of iPhone sales has dropped since the 2007 launch, and has warned that sales will begin to fall later this year.
Apple sold 74.8 million iPhone devices in the first fiscal quarter, which is hardly anything to be sniffed at, however this shows the lowest increase in sales the company has seen for the product. Last year the company sold 74.5 million in the same time frame, and despite current results being a record breaking success it is apparent that the fever is slowing down. As iPhones are the main source of income for Apple, this could be a concerning development for their future plans.
Luca Maestri, the chief financial officer, has warned that further sales are set to decline later on in 2016 and blames the complex values of US currency for removing $5 billion, 8% less than they would have earned otherwise. Tim Cook, Apple’s CEO had this to say:
“We do think that iPhone units will decline in the quarter…We are in an environment now that is dramatically different…extreme conditions, unlike anything we’ve seen before, just about everywhere we look.”
Sales in both the US and Japan have declined to 2% growth, which is a significant decrease from last years 30% increase. Holiday sales were dramatically lower than was expected, but the company claims to not be slowing down on investment and production for the foreseeable future. Maestri has commented that the iPhone’s enormous sales and spread make it vulnerable to such declines, and that these results were in many ways expected.
But what does this spell for the future of the iPhone? Apple has stated that while declines in the west could be a problem soon, growing markets in areas such as China could be the solution as the countries interest in smartphones grow. However, even though growth in the region is one of the fastest, there is still signs of decline in the near future. Maestri comments:
“In spite of the fact we produced our best results in mainland China and Greater China, we can see some signs of economic softness, particularly in Hong Kong right now,”
Every bubble is bound to burst eventually, and Apple isn’t free from the cruelties of the market. While the company is far off finding itself in any financial danger, these drops show significant signs that some form of innovation is required to secure a brighter tomorrow. iPhone sales dwarf the competition currently, but this slow drop in growth could provide an excellent opportunity for other companies to fill in the gaps. But the truth is, even at its worst, Apple is still stronger than its rivals at their best.
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