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

NEWS ANALYSIS: Apple's business performance disclosed in its latest earnings report disappointed analysts. But does the fault rest with Apple's business plans or analysts' unrealistic expectations?

 

CEO Tim Cook announced record revenues and record profits for the most recent quarter, but you could hardly tell that from the resulting hand wringing by market analysts. Pundits wailed warnings of a market sea change. The sky is falling, Apple has hit a wall. The iPhone era is over.

Nonsense.

While it's true that some market analysts were disappointed that Apple didn't post year over year double-digit growth, the fact is that Apple is doing just fine. However, there are some analysts who apparently aren't paying attention to the realities of the economy or the realities of the technology business who have developed some insane expectations that are causing ructions in the stock market and shaking investor confidence in Apple's prospects.

Let's start with a little perspective, which is something missing from market analysts in this case. A year and a half ago, Apple introduced the iPhone 6 and 6 Plus. These models had larger screens than the previous 4-inch screens of the iPhone 5, and in the process tapped into some significant pent-up demand among people who might have been iPhone buyers, except they didn't like the tiny screen.

With the larger screen, millions of buyers who had been putting off buying an iPhone, suddenly bought one. This resulted in the hottest market Apple has ever seen for its phones. Sales exploded. Tens of millions of people who had been using other phones were now iPhone customers, including me. I finally gave up my tried and true BlackBerry and joined the ranks of iPhone owners.

A year later, Apple introduced the iPhone 6s and 6s Plus. In my review of these models after they came out, I noted that while there were many differences, they weren't necessarily obvious to most customers. In fact, the differences were so much below the surface that Apple had to describe the differences on its Website.

To a geek like me, the new features in the iPhone 6s and 6s Plus were worth having, but most people aren't geeks like me, and the differences weren't obvious to them. As a result, there wasn't a lot of reason to trade in your shiny new iPhone 6 for a 6s. This meant that the usual frenzy that comes with a new iPhone was diminished, and sales didn't grow as fast.

Adding to that diminished frenzy, many, perhaps a majority of existing iPhone users, didn't like the larger size and as a result didn't upgrade. When the rumored new 4-inch iPhone comes out in the spring, featuring the technology of the 6s in a smaller handset, I wouldn’t be surprised if the iPhone sales jump again.



 
 
 
 
 
 
 
 
 
 
 
 
 

Submit a Comment

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























 
 
 
 
 
 
 
 
 
 
 
Rocket Fuel