Wednesday, May 3, 2017

Will Apple Sales Continue to Drop?




For its second quarter, Apple Inc. announced a fall in its iPhone sales on Tuesday. The reason behind may be due to the 10th anniversary edition iPhone product which will be released later this year.

Sell-in figures vs. Sell-through figures

A total of 50.76 million iPhones were sold as Apple’s second quarter ended last April 1. Last year, it was noted that 51.19 million were sold compared to this year’s. Due to this concern, Apple shares went down by 1.9 percent at $144.65 in after-hours trading as investors made their move. 

However, Luca Maestri (Chief Financial Officer of Apple) contended that the reported figures for the iPhone are only sell-in figures (units sold to retailers) and not the sell-through figures (units actually sold to consumers). Following the sell-in basis, the company sold about 52 million iPhones to its consumers. 

Despite the drop in unit sales, Apple iPhone’s profit increased by 1.2 percent but this can be attributed in the rise in their average selling price.

iPhone sales to continue dipping

Apple Inc. CEO Tim Cook even acknowledged the fact that customers are delaying their purchases as they are waiting for future iPhones that are being reported earlier than the usual. Such acknowledgement from the CEO is a clear warning that a dip in the sales of iPhone could endure a year. 

The decline in iPhone sales is the fourth time in five periods in Apple Inc.’s sales history.

Apple’s 10th anniversary iPhone

So much expectation is building up on Apple’s 10th anniversary iPhone. It is expected that the new iPhones will be launched in September. Pre-ordering of new iPhones is set in mid-September and that means it only has a couple of weeks left to make up for weak sales in the second and third quarters. There has been an anticipated jump in sales in such quarter since the 10th anniversary iPhone has features like wireless charging ability, 3D facial recognition and having a curved display. The big boost in sales is projected until the first quarter of the next fiscal year. If investors can wait until then, they will have a lot of cash awaiting them.

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