Just when you would have thought Apple was staring down the barrel comes to the hint that the company may still end up selling $70 million to $80 million iPhones in the second half of 2019. This figure may not be drastically down from the number of iPhones sold by the company during the same period last year. The information appears to be reliable since it has been picked up from the manufacturers of components of iPhones and based on their production plans. Apple’s contract manufacturer Foxconn is reported to be hiring more hands and paying them more.
Smartphone Markets Showing General Decline
There are several perspectives being offered by the analysts for the general decline in the sales of smartphones. The trend is almost universal and it has been witnessed that the higher end or premium phones have taken the maximum hit. One factor being cited is buyer-fatigue meaning the smartphone buyers don’t see any new feature that attracts them to buy the devices. Manufacturers have also run out of ideas. Apple’s devices are slotted in the premium segment and no major changes are expected in the new iPhones this year from the ones released in 2018 either. With that background, even if Apple manages to hold on to the same numbers this year, it should be a great achievement.
The China Factor Casts its Shadow Too
There has been a virtual cold war on the trade front between the US and China with both imposing stiff tariffs on each other’s products. Companies like Apple get immediately affected since most of the components are made and even the assembling of the iPhones is done in China. Sale of iPhones in the Chinese market, one of the largest for Apple, has not been very impressive either. There is some temporary truce, but it is not clear how long this will last. Apple has tried to push the marketing of its other offerings. However, it is iPhone that ultimately adds muscle to the numbers when the numbers are out, whether for a quarter or for the whole year.
Some of the Chinese smartphone brands have launched devices that offer top-end specifications and features that the iPhones do but at prices markedly lower than the iPhones. There is a user community out there which won’t switch to any other brand. The larger issue, however, is of expanding the customer base, which is not happening, thanks to these brands.
Apple may yet see off 2019 without hurting much.