Apple sales of iPhone

The result of Apple’s fiscal Q4 2018, ended on September 30, has been no less than a surprise for everyone. The sales of iPhone in Q4 2018 failed to meet the analysts’ expectations but generated enough of revenue to refrain critics from being so vocal.

Apple Inc. (NASDAQ:AAPL) sold 46.9 million units of iPhone in its fiscal Q4 2018, registering a flat growth compared to the year-ago quarter. What makes the scenario worse for Apple is, this is the fourth consecutive quarter when the Cupertino giant has witnessed either negligible growth or absolutely no growth in the quarterly sales of iPhone.

The trend is indicating a colossal problem Apple has to deal with, and the company has decided to opt more damaging strategy to deal with – hide it!

Before we take a dig into unprecedented challenge Apple is dealing with, let’s quickly have a look at how the world’s most valuable company performed in its fiscal fourth quarter, ended September 30, 2018:

  • Apple sold 46.9 million units of iPhone, generating US$37.19 billion in revenue.
  • The ASP (Average Selling Price) of iPhone soared to $793 from $618 a year ago.
  • Apple sold 9.7 million units of iPad, bringing in US$4.09 billion as revenue.
  • The sales of Mac also declined; Apple sold 5.3 million units of Macs in the quarter as compared to 5.4 million units sold in the same period a year ago.

 

While the sales of all the three major products  – iPhone, iPad and Mac – either declined or stagnated as compared to the year-ago quarter, Apple’s revenue increased by 20% YoY in the fiscal fourth quarter 2018; largely due to the sales of high-end iPhone XS and iPhone XS Max.

  • Apple’s revenue from services increased 17% YoY to US$9.98 billion.
  • Apple’s revenue from other products recorded the maximum growth, bringing in US$4.23 billion, up by 31% YoY.
  • Apple’s revenue in Q4 2018 increased by 20% to US$62.9 billion.

Despite the declining sales of all the major products, Apple has once again managed to beat the Wall Street expectations in terms of revenue. However, the weaker guidance on first fiscal of 2019, ending December 31, 2018, hasn’t gone well with the Wall Street. Consequently, The company’s share value has been on the constant decline since Apple’s fiscal Q4 2018 result is announced.

RIP iPhone Sales Figures

It isn’t the first time when iPhone has failed to receive the response from the market as expected by Apple and many analysts. Since the beginning of 2016, the sales of iPhone has remained stagnated. A closer look at the iPhone sales data reveals that it was only since the end of 2017 when ASP of iPhone started increasing like never before.

 

Both, the declining/stagnating sales and increasing ASP of iPhone, has been attracting enough criticism for Apple, especially at the time when the growth of the global smartphone market is largely driven by developing markets, likes of India.

The contribution of iPhone to the worldwide smartphone shipments has been constantly declining as well. From 18.3% share in Q4 2016, Apple’s share has declined to 13.2% in Q3 2018.

For any company like Apple, this is a severe challenge to address. Apple needed to act, and act fast. However, after failing to find a satisfying number of new customers for iPhone, Apple has turned to a strategy which will allow people to see only the rosy part of Apple’s performance and will have a comparatively lesser impact on its share value.

In an unprecedented move, Apple has decided to stop revealing the sales figure of iPhone from the first quarter of fiscal 2019.

And, to make it look a strategic decision, Apple will also be hiding the sales figures of iPad and Mac.

Apple’s decision to hide the sales of iPhone, iPad and Mac in terms of unit, also hints about the rainy days Apple could be witnessing in the quarters to come – sales of iPhone going negative.

Apple no longer wants people, journalists and analysts to focus on the declining sales of iPhone.

The surprise move by Apple, however, has attracted strong criticism by analysts and journalists who believe that Apple wants to judge its cart by value and not by volume. And, why not, when volume economy is doesn’t fits well in the overall company’s strategy and it makes sense for Apple to leverage more on value economy which is, by far, looks quite promising.

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