The era ended: iPhone sales have fallen to record levels again


The era ended: iPhone sales have fallen to record levels again. Apple provided a financial report for the third quarter of 2019, according to the results

The era ended: iPhone sales have fallen to record levels again
The era ended: iPhone sales have fallen to record levels again



Apple provided a financial report for the third a quarter of 2019, according to the results of which it reported a reduction in profits by 13%. Even though the Mac and wearable devices of the company showed good performance, all the attention of analysts is concentrated on iPhones, the sales volumes of which have fallen so much that the revenue from their sales was less than half of the company's revenue.




In the third quarter of 2019, Apple's revenue amounted to $ 53.8 billion, an increase of 1% compared to last year. At the same time, the company's profit decreased by 13%.

At the same time, iPhone sales fell by 12%, while revenue was $ 25.9 billion against $ 29.4 last year.

Thus, for the first time since 2012, revenue from sales of iPhones were less than half of Apple’s total revenue.

  • The attention of financial analysts will be riveted to the next report of the company, as it will include sales of the next iPhone line, as well as, probably, revenues from two new subscription services - Apple TV + and Apple Arcade. However, given the sad trend in revenue from the sale of iPhones, which were once the most popular product of the company, Apple can only rely on wearable devices.


  • Also, on the eve of the publication of the report, it was reported that all three models of the iPhone sample of 2020 will have 5G support. This fact prompted the users of social networks to the idea that the iPhones of 2019 should not be bought at all since they will not constitute anything innovative. Given this information, the September iPhone line is unlikely to please Apple records.


  • “Apple reported revenue growth of 1% to $ 53.81 billion, while profits fell by 13%. At the same time, both indicators exceeded expectations: revenue - by almost 1%, and earnings per share - by 4%. The company revised its revenue forecasts to $ 61-63 billion. Apple's financial performance was unexpectedly provided by Mac and iPad, whose sales grew by 10% and 8% respectively. At the same time, iPhone sales volumes fell by 12%, ”Vadim Merkulov, director of the analytical department at Freedom Finance, told a website.


Revenue from services, which will be one of the main growth drivers for Apple after 2021, increased by 12.6% to $ 11.5 billion, showing the lowest rate since 2015, which casts doubt on the financial the potential of this segment.

  • In 2018, 65% of the company's revenue came from sales of smartphones and 15% from services, and for the complete transformation of the revenue structure, revenues from this segment should at least double.


  • Sales of Apple Watch, AirPods and other "related" devices increased by an impressive 48% during the reporting period, exceeding the iPad sales volumes and almost catching up with the Mac.


  • “I believe that sales of this category of products will be the third-largest source of revenue in the 2020 fiscal year. Accessories on margins are superior to any other segment of the company's business, which will prevent a serious drop in profits. However, growing spending on research (+ 15% y / y in the reporting quarter) and the purchase of Intel's mobile business in the next two to three years will reduce margins to 18-19%. Despite the deteriorating situation, Apple will continue to generate cash flow by transforming its business. The target price for the company's shares by the end of the year is $ 226, ”Merkulov concluded.


  • It became known last week that Apple made a deal with Intel to buy the company's modem business for $ 1 billion. Considering that Apple has long wanted to launch production of its own chips, this can be called a good acquisition.

The new division will also help Apple better prepare for the introduction of 5G in 2020.

Despite the fact that by this time iPhones will appear on the market, in which Qualcomm modems will most likely be installed, it is possible that in future the Apple will be able to produce its own chips, becoming more independent of others.

In addition, Apple’s own modems will allow Apple to ensure proper synchronization of hardware and software.

However, some analysts believe that Apple unscrewed Intel's hands, forcing them to sell the business for a song.

Rob Enderle of Enderle Group told Business Insider that Intel was in a “terrible position for negotiations,” because he was trying to get rid of the unprofitable division and was not in a position to bargain with Apple.

"Intel essentially gave up its intellectual property for $ 1 billion. And this amount is much less than the" several billion "that was originally predicted," said Bernstein Research analyst Stacy Rasgon.

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iPhone users are increasingly moving to Android: no one needs an iPhone

  • User loyalty to the Apple brand has dropped to a minimum since 2011, according to BankMyCell research data, which allows exchanging an old phone for a new one. According to statistics, the number of iPhone owners who want to exchange the old Apple gadget for a newer version has decreased by 15.2% compared to last year.


The era ended: iPhone sales have fallen to record levels again

  • Apple's brand loyalty among iPhone owners is falling, according to CNET portal, citing BankMyCell research. Compared to March 2018, the number of people who have exchanged their old iPhones for new models has decreased by 15%. They chose to abandon the "apple" brand in favour of smartphones based on Android.


  • The BankMyCell portal, which allows you to exchange old smartphones for new ones, collected statistics from 38 thousand people who used the service. As it turned out, 26% of people who wanted to part with their iPhone X, which was first introduced two years ago, purchased a smartphone of another brand. For comparison, only 7.7% of Samsung Galaxy S9 owners switched to iPhone, and 92.3% made a choice in favour of the Android operating system.


  • According to statistics for June 2019, 18% of people exchanged their iPhone for a smartphone of another brand.



As follows from the information

BankMyCell’s loyalty to the iPhone is at its lowest point since 2011 - 73% compared to the highest rate of 92% in 2017 when the iPhone X appeared.

The analytic agency Kantar Group agrees with these data, which announced that according to the results of the quarter ended in June 2019, Apple gadgets accounted for 36% of total US smartphone sales, which is 2.4% lower than in the same period last year. At the same time, the share of Android-based phones increased by 2.5% and amounted to 61%.

Indeed, the demand for iPhones worldwide has fallen. In early July, it became known that Apple must pay Samsung a large fine due to the low sales of its once-popular gadget.

The fact is that in the latest versions of the iPhone, OLED displays are used, which are manufactured by the South Korean vendor. Samsung signed a contract with Apple, according to which the latter was to acquire a certain number of such screens. Nevertheless, the Cupertino bought fewer displays than planned due to the low demand for the iPhone.

It is reported that the amount of the penalty amounted to $ 683 million.

One of the reasons for the decline in demand for the iPhone is the glut of the gadget market with a large number of devices that are much cheaper than iPhones but have similar functionality. For example, in the Chinese market, the iPhone is lagging far behind its more budgetary counterparts in sales.

Apple’s popularity in China is also not added by the trade war between the United States and China, which continues to this day. When President Trump first announced the imposition of sanctions against Huawei, one of the country's technological leaders, mass calls to abandon Apple’s products as revenge against America appeared on Chinese social networks.

“The functions in Huawei gadgets are comparable or even surpass those in iPhones. Since we have such a good alternative, why are we still using Apple? ”Asked one user of the Chinese social network Weibo.

“I feel ashamed of watching the trade war. When I have money, I will change my smartphone, ”said another user, who sent a message from an iPhone.

The loyalty of users of Apple phones is falling - this is reflected in sales, which peaked in 2015 at 231 million units, and then dropped to 211-217 million units over the next three years, Freedom Finance Analytical Department director confirmed to a website. Vadim Merkulov.

The outflow of users from the ecosystem did not affect the financial condition of the company due to rising prices for devices.

Apple will compensate for the future decline in loyalty by introducing services and increasing them in the revenue structure, ” said a website

Last week, Apple found itself in the middle of a spy scandal - a vulnerability was found in the “Radio” application that allows you to listen to the iPhone without the consent of its owner. As reported in the "apple" of the company, as long as they do not have data on whether someone had time to abuse the security hole for their own selfish purposes.
“The company has even announced that it will no longer publish iPhone sales in pieces, so as not to show a decreasing trend

The era ended: iPhone sales have fallen to record levels again The era ended: iPhone sales have fallen to record levels again Reviewed by Write What's you know on July 31, 2019 Rating: 5

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