The writing was on the wall all along.
Apple will be launching its 2019 iPhones in a few short weeks in early September with its three models being referred to as the iPhone 11, iPhone 11 Pro and the iPhone 11R. Tech insiders the world over expect that Apple will not debut its breakthrough features in this year’s models but save them for the 2020 lineup. Without these cutting-edge features, you can expect Apple sales to continue to stagnate and this will leave Apple’s CEO, Tim Cook in a bit of a dilemma.
This doesn’t mean that the iPhone platform will be done and dusted and as Forbes explains it “but Apple’s promotion of high-end premium handsets sits in start contrast to the drive to be a software and services company that requires a huge install base that is willing to hand over for years and years of ongoing revenue.”
After previous reports that Apple fans in China have lost confidence in the iPhone, the latest data pertains to the European market and researchers from Canalys claims that there is a 17 per cent drop in the iPhone market share. As per a report by 9to5Mac, “The market intelligence company says that iPhone European shipments fell from 7.7M in Q2 2018 to 6.4M in the same quarter this year. That 17% drop in sales saw Apple’s share of the European smartphone market fall from 17% to 14.1% during the 12-month period.”
Based on these findings, Tim Cook’s answer to this was undertaken a long time ago with it being two-fold. Earlier, Tim Cook and Apple stopped releasing unit sales of iPhones to mask the decline. By implementing this tactic, the focus would hopefully move away from the company’s hardware to software and services that could replace hardware sales.
The iPhone revenue from sales is dropping rapidly and as per the recent earnings, it has fallen below 50 per cent for the first time since 2012. To put this into perspective, iPhone sales have dropped from USD 29.47 billion to USD 25.99 billion. Apple’s service business did go some way in bringing up its personal high of USD 11.46 billion in revenue; however, overall revenue has dipped year on year.
Forbes states, “And therein lies the first chapter of the nightmare. Software and services need a longer runway to build up its revenue (let alone the profit, I’m curious to see the respective margins between hardware sales and acting as a content reseller), and that runway is built on sales of the iPhone. If the sales of the iPhone continue to slow, then Apple has some hard truths to face up to.”
If Apple truly wants its iPhone sales to increase, then it needs to add new and exciting cutting-edge tech in each and every release. While this year’s iPhone will be new, it will not have an extensive feature-set. The 202 iPhones, on the other hand, will boast a full-screen display, multiple-camera lens, 5G connectivity, long-lasting battery life, fast charge capabilities, and enhanced security features.
If Apple is unable to entice its customers year in and year out, they will continue to have a problem with the iPhones as people will lose interest and start switching over to other brands.