Troubled times ahead for Apple but they won’t tell

Troubled times ahead for Apple?

While the global tech giant Apple could hardly be described as an ailing company, it has taken a bit of beating since declaring its fourth quarter figures, which saw its stock price fall by 7%.

But what has got analysts all-a-twitter has been Apple’s response to the lacklustre figures. In particular the decision to stop reporting unit sales of its products next quarter, including the iPhone.

In effect Apple will not be reporting how many, or how few iPhones will be sold over the crucial holiday season and the important months that will follow the release of three brand new iPhone models.

Undoubtedly, since Apple decided to put a high price on its iPhone the actual numbers sold has declined and consumers have responded by keeping older models for longer than they had previously.

Now the iPhone’s 1.3 billion installed users have increasingly looked to upgrading their existing phones rather than shell-out for a new model. Recently, Apple reported that 50% of all active iOS users had upgraded.

This combination of higher priced phones and consumers’ reluctance to purchase new models has hit Apple particularly hard. In response Apple say that they believe that their Services business will make-up any potential short-falls.

In 2016 Apple indicated a change in strategy when they gave their app developers a pay rise. Apple used to demand 30% for app developers. It cut this to 15% for those that were downloaded and kept active for more than a single 12-month period.

This itself was in response to apps like Netflix which were avoiding signing-up subscribers through the App Store to evade the Apple tax.

Last year Apple made $11 billion from App Store sales. These were collected from in-app purchases, paid apps and ad revenue from promoted apps, coupled with substantial sales from its own subscription services such as Apple Music.

But, according to many analysts, simply adding a toll for subscription apps for digital services will not give the revenue boost to overcome the consequent fall in iPhone sales.

Experts are now openly talking of whether Apple can continue its phenomenal winning streak the iPhone has given them in the last decade. This is quite a turnaround for the could-do-no-wrong of the company Steve Jobs founded.

In response Apple has made it much harder to see how good or bad iPhone sales are, while shifting towards a new narrative that emphasises Services revenue. And eventually taxing all of the apps in the Apple ecosystem in some way.

All the time, of course, Apple must deal with those monoliths Google and Amazon with their fast growing ecosystems based around Alexa and Google Assist.

Image: Blake Patterson


A veteran freelance journalist writing extensively on internet news and cybersecurity.
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