Apple’s recent earnings report showed that for the fourth time since the device’s debut a decade ago, iPhone sales have fallen. While analysts initially predicted that Apple would be able to sell 52 million iPhones in the past quarter, the tech giant has only been able to sell 50 million devices. Addressing the drop in revenue, CEO Tim Cook stated that the less than expected earnings were partly a result of iPhone 8 leaks and rumors, as well as the company’s miscalculations over the iPhone 7 Plus’ popularity.
Apple reported $52.9 billion in revenue, which is slightly below what analysts initially estimated from the iconic tech firm, according to a report from The Washington Post. Since two-thirds of the company’s revenue comes from the iPhone, the pressure is now on for the upcoming 10th-Anniversary flagship to ensure that it becomes an immense success. For his part, Apple CEO Tim Cook stated that the slump in iPhone sales is partly due to the rumors and leaks that have been emerging about the highly anticipated iPhone 8, a device speculated to be far superior to the company’s current flagships.
“We’re seeing what we believe to be a pause in purchases of iPhone, which we believe is due to the earlier and much more frequent reports about future iPhones. That part is clearly going on. We are seeing that in full transparency.”
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The iPhone 7 and iPhone 7 Plus, while excellent smartphones, polarized a significant number of would-be buyers, mainly due to its outdated design and marginal upgrades from its predecessor, the well-received iPhone 6S and iPhone 6S Plus. Even in 2017, many Apple smartphone owners still use an iPhone 6/6 Plus or iPhone 6S/6S Plus smartphone, as the devices continue to perform well to this day.
Apart from this, the iPhone 7 and iPhone 7 Plus’ design changes, such as its removal of the 3.5mm headphone jack, has proven controversial, discouraging some iPhone 6S and iPhone 6S Plus users to hold out on upgrading their smartphones. Couple this with rumors stating that the iPhone 8 would be a significant improvement over the last three smartphone generations, the incentives for upgrading to the iPhone 7 and iPhone 7 Plus become rather weak, according to a Business Insider report.
Tim Cook, however, also noted in an earnings call that the drop in Apple’s revenue over the past quarter was due to the company miscalculating the popularity of the iPhone 7 Plus. Due to this error, Cook stated that the Cupertino-based tech giant was hit by supply problems, in order to meet the demand for the larger, more powerful handset. Considering the specs of the two devices, the supply issues of the larger device makes sense, especially considering that the iPhone 7 Plus was more a flagship device than its smaller sibling.
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The massive popularity of the iPhone 7 Plus could mainly be attributed to the fact that it feels much more like a full upgrade than the smaller iPhone 7. Equipped with more RAM and Apple’s first dual-lens sensor, the iPhone 7 Plus was lauded as the tech giant’s true flagship of 2017, boasting one of the most critically-acclaimed cameras in the mobile market. Compared to the iPhone 7, the iPhone 7 Plus was simply a much more capable device. Thus, it simply attracted more consumers.
Georgetown University’s McDonough School of Business professor Thomas Cooke, however, stated that while Apple’s revenue took a hit last quarter, the company should be able to pull through really well in 2017. The arrival of the iPhone 8, if anything, would give the Cupertino-based tech giant a much-needed boost in sales and a renewed interest in its mobile division.
“This is acceptable, considering the environment and that they have new products in the pipeline. That people are holding onto their phones a little longer than expected shouldn’t be so alarming.”
The iPhone 8 is expected to be announced sometime during the latter half of 2017. Pricing for the upcoming flagship device remains unknown, though speculations point to a price that is north of $1,000.
[Featured Image by Marcio Jose Sanchez/AP Images]