Apple’s dreams were not fully actualized last year and this was as a result of its low sales of iPhone XR, XS/Max. The tech giant finally acknowledges lower-than-expected iPhone sales.
Two main factors could be attributed to the low sales of iPhone last year. First, was the iPhones’ price point. The iPhone XS started its selling price at $999/N360,000. While iPhone XS Max started at $1100/N396,000. And iPhone XR being the Lowest started at $749/N270,000.
Another reason for the iPhone low sales was Apple facing much fiercer competition in the Chinese market from other big Chinese players like Huawei, Oppo, vivo, and Xiaomi. Besides, with much higher price points, the Chinese consumer preferred to spend a fraction of the cost of a new iPhone on something more affordable.
Summary of Apples Open Letter to Investors (Concerns Over Sales of iPhone)
Apple has released an open letter to investors revising its guidance for Q1 of this year. The “guidance” is the info a company provides as a way to predict its future earnings.
Here is a little extract from Apple’s official letter to investors pointing out where Apple acknowledges lower-than-expected iPhone sales last year.
Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline. In fact, categories outside of iPhone (Services, Mac, iPad, wearables/Home/Accessories) combined to grow almost 19 percent year-over-year.
While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be. While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.
For its smartphone (iPhone) business, Apple will thus, now have to change its strategy and approach to suite that of the present tech market if they must succeed. Else, they will keep losing consumers to other competitors especially to the Chinese companies.