Slower Apple Handset Sales Don't Signal the End of the iPhone Boom

By Wayne Rash  |  Posted 2016-01-27 Print this article Print
iPhone Sales

The difference between the people willing to upgrade from a 6 to a 6s and the people willing to upgrade from a 5s to the projected 6e (assuming that's really the name for the new smaller iPhone) is that there's a much bigger difference between the older 5S and the new phone.

One of the differences is the pressure-sensitive screen, which works nicely and there are a couple of cool things that users can do with this feature. However, few apps took advantage of it and there wasn't much in iOS 9 that made it compelling either.

Likewise, most people have little reason to care about the faster processor or the faster fingerprint recognition. As nice as the better camera was, the camera in the earlier models was already good enough for selfies and snapshots.

What this boils down to is that few actual users (besides us geeks) really felt any burning need to drop everything and upgrade. I realized this at the time the 6s came out and said so. So did many others who wrote about this product. So it should be no huge surprise that iPhone 6s sales didn't explode as they did with the iPhone 6.

Likewise, other Apple products didn't really set the world on fire, either. The iPad Pro, which is without question the best iPad ever, didn't fit the needs or the pocketbooks of many users. With a cellular capable iPad now costing over $1,000, there's a big affordability gap.

All of these factors are plainly visible to anyone who is even slightly familiar with Apple's product line. So why did the financial analysts persistently predict huge growth for Apple's revenues? The reason is simple. They looked at sales charts and made the assumption that past performance will predict future market behavior.

If that sounds familiar, it's in the disclaimer on basically every financial prospectus circulating in the market. When you buy stock or mutual funds, there's always a warning that past performance is not to be relied on for future market performance. Yet, the analysts for the same firms that include that disclaimer simply ignored their own advice.

What this means is if Apple's stock price (or any other company's price for that matter) is important to you, then do your own due diligence. The analysts are frequently looking at last year's charts and numbers, not the reality of today's market.

It doesn't mean that the days of big iPhone sales growth are over. The release of a couple of new phones, including a smaller iPhone 6, and the iPhone 7 next fall, will probably spur sales. Meanwhile, it was still a record quarter and it's hard to fault that. Unless you're one of those analysts with misplaced expectations.


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel