iPhone in BIG trouble, as Apple blames everything but Apple

The throne shall never be empty. The country shall never be without a monarch.

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Apple, Inc.

iPhone revenue is, at best, flat: Apple's last quarter didn't see a drop, but next quarter will, says Cupertino. Tim can't rely any longer on the iPhone to keep bringing in record quarters.

All the holes in the Swiss cheese are aligning, as many factors are combining to spoil the party. Most commentators blame global slowdowns and the strong dollar, but Apple isn't admitting to its over-priced, me-too product line.

It'll be the first revenue drop since... well, scribblers disagree, but it was some considerable time ago. Oh and by the way, iPad sales are doing catastrophically bad.

In IT Blogwatch, bloggers wake up and smell the blue mountain. Not to mention: Let's play OXENFREE...

Your humble blogwatcher curated these bloggy bits for your entertainment.
[Developing story: Updated 4:44 am PT with more comment]

What's the craic? Adam Satariano leads with Apple Forecasts First Sales Drop Since 2003 on iPhone Slowdown:

Apple Inc. is forecasting a sales decline for the first time in more than a decade.

That follows a holiday quarter in which...iPhone shipments fell short of projections. ... The company’s dependence on the iPhone leaves it vulnerable.

Luca Maestri, Apple’s [CFO], said the company...is beginning to see "softness" in China, particularly in Hong Kong. ... Canada, Brazil and Russia also are showing signs of slowing down...he said.

Oh dear. Katie Benner eulogizes—Apple Reports Slowing Growth for iPhone Sales:

Apple’s iPhone has officially entered a slow-growth period.

It sold 74.8 million iPhones in its fiscal first quarter. ... That represented the slowest year-over-year rate of growth for the device since it was introduced [but it] accounts for two-thirds of the company’s...revenue.

Apple’s rate of growth is not set to improve anytime soon.

The company did see growth in services...while revenue from a category known as other products — which include the Apple Watch — increased 62 percent.

But it's complicated. Or so Dan Seifert says—Have we reached peak iPhone?:

Falling iPhone sales...have been predicted for some time now...but analysts have predicted [Q2] declines as high as 25 percent.

The other factor that is pummeling Apple's sales is the overall decline in China's economy [and] currency exchange rates.

Doesn't sound that complex to me. Benedict Evans cuts to the chase in fewer than 140:

Apple predicting March quarter revenue will be down. That hasn't happened since before the iPod.

But it could be worse. Adrian Kingsley-Hughes explains, in iPad goes into a nosedive:

Things don't look good at all. It looks like...the time of the iPad has come and gone.

Big trouble could be looming in the future. ... Unit sales have tanked by a staggering 25 percent. ... This is the second holiday quarter [that's] seen a huge decline.

Even the iPad Pro didn't manage to give sales a kick up the rear.

Update: Lest we forget, Apple still made lots of money last quarter. Jay Somaney reminds us where the problem lies—Apple's Record Quarter To Nowhere:

Apple reported December quarter results...with record revenues and gross margins...better than their own guidance [or] Street estimates. .. Revenues and profits were the highest ever...for the company.

[But] there is no hiding from the fact that the guidance...calls for the steepest decline in over a decade. ... Tinkering with size/speed/color/resolution/thickness/weight/etc. of the iPhone...will not make consumers run out and grab the latest.

Apple needs to...put its cash to use with an imaginative acquisition soon. So maybe a Tesla acquisition would make sense.

As usual, there's some interesting discussion at my Google Plus collection. For example, this from Lewin Edwards:

Eevery huge growth story stalls, because growth is limited inherently by the number of living people in the target market, and availability of resources such as money, energy.

Exponential growth is completely impossible to sustain for any business, be it iPhones or pet rocks. This is why companies like Apple have been desperately trying to create new markets for unwanted products like smartwatches, home automation walled gardens.

They're throwing things against the wall to try and capture discretionary dollars from other fields. The Next Great Thing has not yet been found, and there is no reason to assume that the Next Great Thing will be discovered by Apple.

And Finally...


You have been reading IT Blogwatch by Richi Jennings, who curates the best bloggy bits, finest forums, and weirdest websites… so you don’t have to. Catch the key commentary from around the Web every morning. Hatemail may be directed to @RiCHi or itbw@richi.uk.
Opinions expressed may not represent those of Computerworld. Ask your doctor before reading. Your mileage may vary. E&OE.


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