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Why Are iPhone Sales Dropping?

Why Are iPhone Sales Dropping?

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    Mar 20, 2016   Author : admin

Posted in: BOOKS AND WEB

The iPhone is always big news but it isn’t often that it is poor sales that cause people to write about it.

However, Apple CEO Tim Cook recently said that they expect iPhone sales to drop year on year for the first time ever in this current quarter. This downturn will occur if, as expected, they fail to sell more than 61.2 million iPhones during the three month period.

The knock on effect of falling iPhone sales is that Apple is expected to post its first annual drop in revenue in an incredible 13 year run of success. This is because the phones give the company about two thirds of the money they make. So why are iPhone sales being hit in this way?

Still Selling Lots of Phones 

The first point to bear in mind is that Apple is actually still selling a huge amount of phones and making a whole lot of money from them.  In the three months at the end of 2015 they sold a whopping 74.8 million of their iPhones, although this translated as a record low sales growth of only 0.4%.

It could be that the real reason for this issue is that the market is simply now saturated with iPhones, as well as cheaper alternatives. Perhaps the number of people around the planet looking to buy an expensive, cutting edge new phone isn’t big enough to carry on supporting the amazing growth Apple has enjoyed in recent years.

This is why it is so important for the company to move into new markets and to entice customers with new features and upgrades. However, the current US dollar exchange rate makes their overseas trade less profitable, while not everyone can afford to upgrade to a newer and better phone every year.

A New Budget iPhone in 2016?

There are also rumours of a new budget iPhone coming out in 2016, which could be seen as a direct response to falling sales growth, as well as an attempt to break into emerging markets with less spending power. 

It remains to be seen whether this is just a temporary blip in the impressive Apple sales chart, which has been rocketing upwards for more than a decade.  Otherwise, it could be a sign that the golden days of ever-increasing iPhone sales are finally over.   

Images: Apple.com, Bubblear.com | MYC Writer: Robert Bell

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