Apple Expects First Ever Decline of iPhone Sales Next Quarter

[username:]

This is because Apple makes quality. And many customers are still using iPhone 4s! I still see so many iPhone 4s around. iOS users don't need to be buying a new phone every year. We own quality products that last.

No need to worry about this. Apple has a solid product line up, with promising new markets like wearables, cars, HomeKit, HealthKit, etc. They consistently stay ahead of the curve in tech, software and hardware is market leading. This isn't the days of Apple 2 or bust.

 

[okboy]

Considering the cost of an iPhone sits at about $671 there is only so much market you can capture at that price range.
If I remember correctly doesn't apple capture about 90% of the entire smartphones markets profit already? I'm not sure how Apple can get out of the law of numbers.

People have been referring to this "law of numbers" in their predictions of Apple's decline for years now and it hasn't come to fruition.

The "law of numbers" that no one seems to be talking about is simple economics: Apple has raised the price of the iPhone because of weak currencies worldwide, and when you raise prices, sales fall.

No, no it's must be some inevitable invisible hand of the market, or maybe a software bug in iOS that is hurting sales.

 

[NissanGuy23]

I guess I'm not smart enough to understand what they are saying. I would rather see a graph. They are saying that they think sales for Q1 2016 will be less than Q1 2015? Is that a huge deal?

 

[mantan]

had to happen. Apple ran out of markets to expand to. First they pushed it as a mainstream device and infiltrated kids and the older crowd. They expanded to every market possible with China being the final frontier. Now it's a fairly mature device and other than the built in obsolesce that iOS brings with each major update, there is nothing generating a huge growth in sales.

Agree with the comments above that Apple needs to diversify....but back to stuff that made life simpler and better, not things they don't do well. (TV, cars, etc.....)

 

[animatedude]

"Cook said that 60% of customers who have owned an iPhone prior to the iPhone 6 and iPhone 6 Plus have not yet upgraded"

Wow! no wonder they are releasing a 4-inch iPhone again.

 

[okboy]

had to happen. Apple ran out of markets to expand to. First they pushed it as a mainstream device and infiltrated kids and the older crowd.

People have been saying this for ages. Then look what happened with the iPhone 6.

 

[Zwhaler]

Strange world we live in where selling 61 million iPhones in a quarter is considered bad or merely ok (yet disappointing) instead of good.

 

[gbc204]

this is a very good point. I know my personal upgrade cycle will be effected. I was on an very 2 year cycle. Now it will probably ever 3 to 4. I can afford every 2 years. I just won't.

Why would that make a difference? My bill is actually noticeably less now that there are no more contracts/phone subsidies. You pay more up front for the phone but you save money in the long run, even over two years.

 

[routine_analyst]

You have a dork who has taken credit for the steam created by his predecessor, riding aboard a massive locomotive downhill... now finally the giant has hit a valley and the train now needs something more than just different sizes of a product invented nearly a decade before to climb the next mountain.

War time CEO vs Peace time CEO ... Jobs vs. Cook ...

Cook wasted breath wandering the globe, meeting leaders of countries and politicians, prolific in his progressive agenda, and leaving the innovation to an aging group who seem to care more about expensive houses and cars more NOW than they did when their abusive leader was around. Say what you will about Jobs being dead for quite a while, but it was the steam of Jobs that got them to where they are today, not Cook. They've always needed that war time CEO mentality... but they don't have that anymore. They have Cook, and he will be responsible for the slow but steady fall into disorder, found just around the river bend.

 

[AronDraws]

If the iPhone didn't cost an arm and a leg, I'd be able to afford to actually replace this lemon I got from them that replaced a swollen battery on the prior one.

 

[JoEw]

People have been referring to this "law of numbers" in their predictions of Apple's decline for years now and it hasn't come to fruition.

The "law of numbers" that no one seems to be talking about is simple economics: Apple has raised the price of the iPhone because of weak currencies worldwide, and when you raise prices, sales fall.

No, no it's must be some inevitable invisible hand of the market, or maybe a software bug in iOS that is hurting sales.

I never said there was an invisible hand, I'm saying Apple can't force countries to produce more citizens who have the free income to purchase Apple products. If you're literally capturing 90% profit of a market, you are reliant on outside forces to keep the market growing, in particular 3rd world countries middle class growth.

I don't think Apple is doomed, but I also think they are more dependent now on currency and economic performance of entire nations rather than the quality of their product.

Pushing costumer sat from 99% to $99.5 isn't going to give you double digit growth next year.
[doublepost=1453851977][/doublepost]

People have been saying this for ages. Then look what happened with the iPhone 6.

There were leaked slide metrics from Apple in 2013 showing Apple hadn't infiltrated a well established 4"+ screen market of smartphones, now over a year later they have. The android switch rate is at an all time high for a reason.

 

[femike]

Well I still have the iPhone 5S and it works great. Like me I am sure a lot of people hold to their phones for awhile. The every year upgrade is great but honestly I don't have that money to burn and my current iPhone works like a charm. So for me a 3 year upgrade window works well.

I agree, same. I'm still using 4S, still working perfectly and happy with it, and its small. However, if I was using Android or MS phone, I would definitely would of bought a new one. So, Apple should aim for long term sales, and keep the customer return rate up. Short term targets is no plan for the future.

 

[rdlink]

They're making lots of money but it's a scary thing for investors to have almost seven tenths of Apple's bread and butter coming from one product line (iPhone).

Everybody keeps saying that. But as Cook said today, the iPhone has a 99% customer satisfaction rating. That means that people who own one now will eventually buy another one.

 

[Douglas B]

I guess I'm not smart enough to understand what they are saying. I would rather see a graph. They are saying that they think sales for Q1 2016 will be less than Q1 2015? Is that a huge deal?

Yes they are saying they will be lower.
Looking back to the year before, Q4 2014 they could not make enough iPhone 6 and 6 Plus to keep up with demand and many people had to wait until Q1 2015 to get theirs. This made Q1 2015 up 27% on Q1 2014.

This year though, they were able to make enough iPhone 6S and 6s Plus in Q4 2015 so there won't be lots of people who had to wait until Q1 2016. I presume iPhone 6S/+ would have been easier to make since many components would be shared with the prior years model (iPhone 6/+).

That would be part of the decline. Higher prices in many countries because of currency moves will be part of it.

Also, I guess this means they won't be releasing the 4" phone this quarter.

 

[Deuce on the Clock]

The China Syndrome is taking its toll. And people are realizing its a 700 dollar product now that subsidies are gone.Each qtr numbers will fall going forward. There is no need to release a phone every year. Work on the software glitches and bugs.

 

[kerrikins]

Well, it has to happen sometime, might as well get it over with.

1) Steve Jobs was right. Phablets are stupid and DROPPING the 4inch phone from the upgrade cycle from also really stupid. I personally do not want a giant phone, if anything I'd be very happy with a tiny one.

2) The new products are not aesthetically pleasing... the new iPhone looked weird, face it. What are those lines? They don't look good, it's not "simple". Ivy wagwon?

This makes no sense, if your thoughts were accurate then we would have seen a decline when the 6 first came out, not a year later.

 

[OllyW]

"Cook said that 60% of customers who have owned an iPhone prior to the iPhone 6 and iPhone 6 Plus have not yet upgraded"

I think these are generally referred to as the Normal People.

 

[normanfox]

Nothing can fight against gravity force. anything goes up must come down at some point.

I expect to have big discounts for iphone this coming holiday season, as the ipad has for the last couple years.

I plan not to upgrade from my current 6 plus to iphone 7 since there is no subsidizing from AT&T anymore. I have been upgrading every 2 years since iphone 4 until now. but if there is a discount of $200 off, I might pull the trigger. still why wasting money to upgrade electronic that does the same thing.

Exciting to get iphone 5 because it is bigger than iphone 4
Exciting to get iphone 6 plus because it is bigger than iphone 5.
Not exciting to get iphone 7 because iphone 6 plus is max with its size

 

[ck2875]

I wonder what part of this, if any, has to do with carriers in the US ending subsidies and people gasping at the upfront cost of their previously "$200" 16GB phone.

At least Tim didn't say to investors, "Don't worry... we'll go back to a 4GB base model to realise the same profits."

 

[ececlv]

They're making lots of money but it's a scary thing for investors to have almost seven tenths of Apple's bread and butter coming from one product line (iPhone).

100% of the profit could come from iphones and it wouldn't scare a rational diversified investor. Investors diversify away risk by investing in more than 1 company.

 

[Benjamin Frost]

1) Steve Jobs was right. Phablets are stupid and DROPPING the 4inch phone from the upgrade cycle from also really stupid. I personally do not want a giant phone, if anything I'd be very happy with a tiny one.

2) The new products are not aesthetically pleasing... the new iPhone looked weird, face it. What are those lines? They don't look good, it's not "simple". Ivy wagwon?

3) Apple keeps handicapping it's computers... The iMac is a desktop, it doesn't need tapered edges, it doesn't need to be [that] thin. We don't get CD/DVD drives anymore and have to deal with mobile processors and mobile GPUs because you want the 27inch computer in a monitor to be thin? That's stupid.

4) Single port laptop, including the charging port?

Stupid moves make for declining sales. Smarten up Tim.

Agreed.

Cook touts 60% not upgrading like it's a good thing. Perhaps those 60% enjoy their 4" iPhones and don't want to use a bloody phablet.

 

[Joe Rossignol]

I guess I'm not smart enough to understand what they are saying. I would rather see a graph. They are saying that they think sales for Q1 2016 will be less than Q1 2015? Is that a huge deal?

Close. Apple predicts that Q2 2016 sales will be lower than Q2 2015 sales. That's sales between Jan 1-Mar 30 each year.

Anything less than 61.2 million iPhone sales this quarter will solidify the first decline ever -- far from a bad thing though.

 

[badboy600]

The end of subsidies especially for at&t customers is a game changer. The funny thing is that most people won't even find out until launch

 

[Rockadile]

Probably just sticker shock from the disappearance of contracts...

Not really...it's now a "low monthly price" than a $200 tag.

 

[LordVic]

This is not a surprise. International sales was expected to slow down over the last little while, led by declines in asian markets. Analysts mgith yell doom and gloom, but lets face it, even if profit itself isn't growing, profit is still profit. This need for record growth every year is just wallstreet greed and has little real life and real economic benefit.