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Corkscrew iPhone: what the experts think about the future of Apple

Apple for the first time since 2003, reported a decline revenue: sales of most popular product the iPhone, which accounted for about 70% of the company’s revenues, fell 16%, to 51.2 million units, sales of smartphones in the past quarter was $32,86 billion showed a Decline and iPad sales and Mac. An additional negative factor was the drop in sales in China by 26%, no better than the situation in other regions: USA: -10%, Europe -5%, revenue growth in Japan by 24% is rather a drop in the sea, the country accounts for only 8.3% of total revenues.

For Apple entering a new reality – the sale of its flagship product, which accounts for about 70% of revenue will not only grow, but to decline. The magazine Time explained why Apple shares will decline, and Forbes — why the company is actually good.

It’s very bad

During electronic trading after the close of markets on April 26, Apple shares fell by 8%, writes Time. This happened despite the fact that the company itself warned that the quarter would not be outstanding. Investors could advance to “throw” securities, but did not. Why? There are at least three answers:

– Very sharp drop in iPhone sales. Never before sale Apple at an annual rate not fallen, and in the second quarter of 2016, the collapse amounted to just 16%. First, users so happy with their iPhone 6 and 6 Plus that just don’t want to change them for new models; secondly, mobile operators are gradually reducing discounts for buying gadgets with contracts — thus, the iPhone (as, indeed, other smartphones) become more expensive.

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— Gloomy predictions of the Apple. It’s not just that the company had a bad quarter; the fact that the next one will be even worse. By his own predictions of Apple revenue in the third quarter of 2016 will be 41-43 billion dollars (in the second quarter, the same figure amounted to 50.5 billion dollars). Thus analysts expected that Apple will rely on $ 47 billion.

— Growth in China gave way to fall. China is the second largest market for Apple and a potential source of stable growth. In the second quarter revenue of American companies in China fell by 26%, and for the reasons which they cannot influence: for example, due to the strengthening dollar and due to the slowdown in the Chinese economy.

All is well

It is hard to imagine that Apple is truly serious difficulties, writes Forbes. Yes, this is not the best quarter in the company’s history, but in fact, Apple earned $ 10.5 billion net profit is 23-th result in the history of the quarterly reports of all companies in the world. Sold more than 50 million iPhone is the fourth result in the history of the company. Even in revenue for the second quarter of 2016 proved to be solid and is in seventh place among all of the Apple quarters.

The decrease in iPhone sales Forbes experts suggest looking on the other hand: it is not now they are low, it’s a year ago, they were phenomenally high. If Apple sells 40 million iPhones, that’s long distance is a very good result. In the second quarter of 2016 has sold more than 51 million iPhones. It is unlikely that such results can speak about a crisis in the company.

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There are two more indicators that indicate that with Apple everything is in order. About the first of them said the company’s CEO Tim cook: over the past six months, from Android to Apple has moved more users than ever. The second listed report: Apple sales in India (and China, this is a very promising market for all technology companies in the world) grew by 56% compared to the same period a year earlier.

Apple has opportunities to change the structure of revenues, and they will do it, but it is not a quick process, analysts say Freedom Finance. While the iPhone sold well, the focus was on them, but now we will see a shift of emphasis towards applications. It is the transition to a model of earning on the content that is already used by Amazon and Xiaomi, will restore the position of Apple. The growth of the segment “Services”, which includes iTunes and the App Store, iCloud, and services, Apple Pay and Apple Music, has the potential to grow 30% per year, including due to still not running services that are based, predominantly, on subscription.

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