Hints that Apple could be lowering the prices of its iPhones in some places to increase falling sale was given by the company’s CEI Tim Cook.
In the latest financial quarter, there was a drop of 15 per cent in the revenue from the iPhone which accounts for the largest portion of profits of the company.
On the over all, there was a drop of 5 per cent year on year in revenues at about $84.3bn.
Earlier in January, the US tech giant had warned of a slowdown in revenues and profits with forecast revenues at $84bn which was much lower than expected a slowdown in demand in China was cited to be the reason for the downgrade in forecast and revenue warning.
But the customers were also struggling with the firm’s high prices, said chief executive Tim Cook.
The sale of iPhones in emerging markets has been hurt by a strong dollar which makes its products comparatively more expensive.
And with the aim of providing some relief to customers because of the impact of currency fluctuations, the company has began to re-price its phones starting this month, Cook said.
“What we have done in January in some locations and [for] some products is essentially absorb part or all of the foreign currency move as compared to last year,” he said.
But despite this the challenges for the company would continue, said company executives.
A drop of at least 3.4 per cent year-on-year was forecast by the company for revenues for the three months to 31 March at between $55bn and $59bn.
“The macroeconomic environment, particularly in emerging markets, will continue to be there,” Luca Maestri, the firm’s chief financial officer, said.
But Apple is not the only firm to face such challenges. According to Canalys, a market analyst firm, there was a 5 per cent drop in the global shipment of smartphones for 2018.
However, since October, the share price of Apple has fallen by about one third because of concerns among investors about waning interest of customers in purchasing iPhones. Yjose concerns turned into fears after the company announced halting reporting in its quarterly performance reports of the number of iPhones, iPads and Macs that the company in its quarterly performance reports.
This quarter was the worst for Apple since more than a decade.
However the investors were somewhat relieved because the results were not as bad as they had been expecting. Further, investors were already ready to see a drop in iPhone sale and a revenue drop over all as the company had issued a warning this month about revenues and earnings that were well below the market expectations – especially in the a quarter that is typically a blockbuster one because the holiday shopping season is included in it.
But Cook said that the strong sales of iPad and Macs and significant growth in its services business made him feel confident about the business.
“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” he said.
(Adapted from BBC.com)