The Golden Era of iPhone May Have Come to an End

Since the debut of the world’s famous mobile phone, iPhone, in 2007, Apple has never lowered its forecast before until yesterday that the company has cut its forecast to $84 billion in revenue for its fiscal first quarter ended Dec. 29, while the original forecast was between $89 billion and $93 billion.

The statement came Wednesday evening after the trading hour, which made Apple’s share to close at $157.92/share, increased $0.18 or 0.11%, while the share fell to 146.00/share, decreased 11.92 or 7.55% after hours.

Apple has been battling uncertain sales figures and smartphone market saturation. Its worst trading day in 2018 came after the third reported financial statement that Apple announced it would stop reporting individual unit sales and revenue figures for the iPhone and its other biggest product lines in its financial statement.

The company recently hit its milestone by achieving $1 trillion in market value. However, the global factors in late 2018 and Apple’s lower-than-expected performance has sunk its market value to only $700 billion.

 

Tim Cook, CEO of Apple Inc., told CNBC that Apple products have not been targeted by the Chinese government, though some consumers may have elected not to buy an iPhone or other Apple devices due to the firm being an American brand.

Meanwhile, the rise of Apple’s rival, Huawei, has already conquered the majority of users in China and the report on second quarter of 2018 shown that the number of Huawei’s sales were ahead of Apple. Furthermore, Huawei also announced that it planned to overtake Apple’s yearly sales in 2019.

 

Sanction of Apple Products in China
A vividly sharp plunge and the rise against Apple products came after the arrest of Huawei’s CFO, Mrs. Meng Wanzhou, in December at Canada Airport. The arrest was called by the U.S. that accused Meng in violating American laws in selling US products to countries banned by the U.S. After the arrest, it was rumored that some Chinese companies even encouraged their employees to use Huawei and promising further benefits when cooperated.

 

Economic Slowdown
Another reason that causes Apple’s sales in China to decline may come from the economic slowdown in China as well. Automakers such as Ford Motor Co, Hyundai Motor Co and Nissan Motor Co Ltd all previously said they planned to cut production in the country.

 

The Price
Some analysts believe that one of the reasons that damages Apple is the price itself.

“Apple sales in China have not been doing well for a few quarters now, part of the reason is that their price points have gone too high – past the $1,000 mark,” said Kiranjeet Kaur, an analyst at market research firm IDC. “almost three times as expensive as phones from other vendors that are filling the mass market.”

Without data analytics the word “too expensive” is heard more often than the past 5-7 years when someone talks about iPhone.

In the latest fiscal year, ended Sept. 29, unit sales of the iPhone were essentially flat from the prior year, while iPhone revenue expanded 18% to $166.7 billion. That growth came entirely from higher prices.

 

iPhone has become a part of our lives for over a decade or a few years in some countries, but may be the top spot of mobile vendor will come a change in a few years.