Apple sales to plummet this year

apple-store-5th-ave_36906Apple has been dominating the market as the world’s biggest company and second biggest smart phone manufacturer. Almost half of the phones sold in the United States are Apple iPhones. The latest flavor in the iPhone devices was released in March this year titled the Apple iPhone SE which was aimed to improve the company’s sales. However Apple reported that its revenues dropped by 13 percent to $50.6 billion as sales of the flagship have fallen.

Toni Sacconaghi, an analyst at the Bernstein brokerage firm commented. “The company grew at astronomical rates, and it’s now so big that its ability to grow at those rates doesn’t exist anymore.”

The dropping sale figures reflect the challenges facing Tim Cook, who took over as chief executive from Steve Jobs in 2011 with the iPhone a success, the iPad booming and the Apple Watch in development.

Source: Fortune

Source: Fortune

Apple introduced its larger-screen smart phones in late 2014 to maintain the sales and keep up with the competition. Still the 2015 successors to those models haven’t generated as much enthusiasm from consumers.

Since its inception, the Apple iPhone had witnessed an never-declining growth in sale rates for the past 8 years. This is the first ever reported drop in sales of the iPhone that is confirmed and made official by Apple. The company recorded 51.19 million devices sold this quarter, down from 61.17 million units last year.

Apple’s chief executive, Tim Cook described the decline as a “pause,” not a fundamental change in the company’s business.

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Apple CEO Tim Cook

This, too, shall pass. The future of Apple is very bright.” he said in a call with Wall Street analysts.

Sales are falling faster in greater China, which includes Hong Kong and Taiwan, than in any other region, down 26 percent to12.49 billion compared with the previous year. Apple’s second-largest market after the United States, Mainland China saw a fall of 11 percent in sales as the country struggled with a slowing economy. In the same quarter a year earlier, Apple’s Greater China sales rose 71%.

Sales of Apple’s other products aren’t compensating for the plummet in revenues due to the drop in iPhone sales. The company stated that iPad sales fell for a ninth consecutive quarter, selling 10.25 million iPads during the quarter, down by 19 percent. The company’s newest product, the Apple Watch, generated an estimated $6 billion in sales in its first year. However, that barely registers on the company’s annual revenue of $233 billion.

While Apple sales are dropping day by day. Rival companies making devices using Google’s Android operating system to produce more powerful, customizable and less expensive smart phones still continue to challenge Apple and pose a serious threat. Will the upcoming iPhone 7 bring a surge in Apple sales? Seems hazy.

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