For the first time in a consecutive streak of 51 quarters of growth, Apple has posted a year-over-year decline – it’s almost first in 13 years. iPhone and iPad sales have been steadily dropping. In fact, the sales of iPads peaked in 2014 and ever since then, despite continuous upgrades and technology improvements, the sales of iPads have been dropping.
Apple brought in $50.6 billion in revenue, according to this Verge report, for the second quarter of 2016 and $ 10.5 billion in profits. It is a 13% drop from the same period in the previous year. For the next quarter the company is projecting a drop of 15%.
Although Apple is still far ahead from competition, the trends are worrying for the company. This is why it is exploring other regions of the world. China too has experienced a decline – outside of the USA it was the biggest market for Apple but there too, due to various factors, the iPhone and iPad sales are dropping.
As a result Apple is focusing on India where it experienced a growth of 50% compared to 2015. They don’t even have their own official outlets in the country yet.
The sales have been sluggish because fewer people are upgrading their iPhones and iPads. This is because there haven’t been significant changes in the product line. They are just adding more space and faster chips that don’t make much of a difference to a casual user who is often a mass buyer. Coupled with the fact that Apple devices are expensive compared to other devices, it becomes a bit difficult to upgrade to newer models.
Maybe this is why Apple is now offering its upgrade program also to online buyers – it used to be available only for in-store purchases.
Besides, to be frank, there are better, cheaper alternatives available in the market. A higher-end Samsung smartphone or an HTC smartphone is much better than an iPhone.
For many years, aside from the looks, there haven’t been major upgrades in iPhones and iPads. Apple introduced a watch and although its revenue is in billions, it’s nothing compared to the sales of iPhones and iPads and the prospects don’t seem very bright.
Apple’s strength has been, historically, introducing devices that no other company is offering. For example, when they started selling iPods, no other company was selling an MP3 player. Similarly, when they started selling the iPhones, no company had ever imagined a smartphone with no physical keyboard. The same goes with iPad – no company was offering a tablet. I think it happened for the first time that by the time Apple launched its watch, wearing smart watches was already an established trend.
So what Apple needs is, aside from newer markets, a trend-changing product that no other technology company is offering.