Slowdown: Apple on Tuesday announced its financial performance for the quarter ending December 29, 2018, and as expected it was underwhelming. The total revenue slipped by 5% to $84.3 billion and the revenue from iPhone fell by 15%. The company had in December warned of lower sales due to decreased demand for its phones caused by the US-China trade war. The prediction for the second quarter isn’t promising either — a revenue between $55 billion and $59 billion, which would lower than last year’s by nearly 3%-10%.
    New reality: The days of rising iPhone sales are over. The reasons are many: The decreased spending by Chinese consumers, rising cost of iPhones, and oddly technological advancement (especially on batteries), which makes a modern smartphone useable for longer periods — thus reducing the need to upgrade more often.
    New pitch: All of this means CEO Tim Cook has a new pitch, something like: We are not an iPhone maker but a platform with 1.4 billion installed consumer base. The number is the total number of active Apple users, of devices including the iPhone, MAC, Watch and more. Apple is calling this “an installed base” to convince investors that these are not customers who have bought a product and left the store, but potential customers for a range of services such as music, video and more. Apple says its revenue from services has increased 19% this year.
    Also discounts: Yet Apple knows it should be selling more phones in emerging markets — in India its market share is in low single digits. So it is offering price cuts — a policy it has been opposing so far. Cook’s justification: Dollar has strengthened so much that consumers are paying more for an iPhone in these countries. So Apple will compensate for this currency fluctuation.

Source: gadgetsnow.com