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Wednesday, January 27, 2016

iPhone slowdown

iPhone slowdown? Is that even possible? But that's what's in the NEWS.

This has prompted APPLE Inc. to forecast a sales decline for the first time in more than a decade, adding to evidence that the market for smartphones is becoming saturated and that expansion in China is no longer enough to maintain the company’s unprecedented run of growth.

APPLE's iPhone slowdown?

On Tuesday, Apple said that revenue will be from $50 billion to $53 billion. This is the first quarterly drop since 2003 and it is also below the average analyst of $55.61 billion, according to Street Account. Some of the analysts look at the Q2 guidance provided by Apple seriously as they are usually quite true.

Shares in the company have fallen nearly 20 percent in the last six months. Dow had a 8% decrease while Nasdaq Composite had a 10% fall for the same period. This probably reflect the worries that analysts have on how the slowdown in China could hurt Apple's expected growth in the region.

While Apple remains immensely profitable, generating a record $18.4 billion in net income on sales of $75.9 billion in the December quarter, it’s no longer benefiting as much from the rapid adoption of smartphones around the world.

Mobile-phone rival Samsung Electronics Co. also recently reported weaker-than-expected results. Apple Chief Executive Officer Tim Cook has expanded in China and released new services and products such as Apple Watch to help broaden the business, but the company’s dependence on the iPhone leaves it vulnerable to any deceleration in demand.

I think I've mentioned this in a post before on how Apple is becoming like Microsoft under the helm of Steve Ballmer. Tim Cook is a brilliant CEO in achieving record sales and profit, but if there is no focus on another breakthrough products or marketing like how Steve Jobs did, Apple will suffer the same fate as any tech companies that grow too big and too comfortable.

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