Has Apple’s core concept reached its peak?

Apple Iphone

Apple has reported its first sales decline in 13 years purportedly due to a drop in iPhone sales. Its quarterly revenue fell by 13% to $50.56bn (£34.39bn) from $58bn last year.

Apple’s most successful product, the iPhone took a significant hit as 51.2m were sold in comparison to 61.2m in the same quarter in 2015. Some have suggested that this is bad news for the technology leader as the smartphone boom may have passed its peak.

“The industry is in a lull between the mobile boom and what comes next in automotive, the connected home, health and industrial applications of the internet of things,” said Geoff Blaber, from CCS Insight.

While Apple Watch sales are totalling an estimated $1bn each quarter, it seems that this is not enough to keep the retailer in the black. Apple’s quarterly profit fell to $10.5bn from $13.5bn year on year.

CEO Tim Cook said that the company still performed well “in the face of strong macroeconomic headwinds”.

Sales in struggling markets hasn’t previously been an issue for the technology giant as Chinese revenue has always boosted its earnings. However, in its second quarter Apple reported a 26% decline in China due to a stronger dollar and slowing Chinese economy.

Its services unit was one area that experienced growth this quarter. Apple reported an increase of 20% like-for-like in App Store downloads, Apple Music and Apple Pay. However this growth could once again be hindered by a new Chinese law which requires all content accessed by its people to be store on a mainland server. As a result Apple’s iTunes movies and iBooks have been shut down. Apple hopes this will be restored soon.

Investors now await Apple’s next innovation to recover from the official decline of its renowned iPhone.

As seen on Retail Gazette – http://www.retailgazette.co.uk/blog/2016/04/has-apples-core-concept-reached-its-peak

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