Tim Cook, CEO of Apple, declared the following on the 26th of April: “OUR product pipeline has amazing innovations in store.” With that statement, he hopes to sound reassuring after the company has just reported their first year-on-year quarterly revenue decline since the year 2003. However, that statement alone won’t bring skeptics to change face immediately. Stocks of the company fell by approximately 8-percent in the hours after the results of the report had emerged. Because of the fallen shares, it had erased more than $46-billion in market value.
Apple Needs a Big Hit to Properly Convince Skeptics
Apple shareholders’ immediate concern is the popularity of the well-known smartphone from the company, the iPhone. The mobile phone accounts for a large sum of the tech giant’s revenues and profits. However, sales for the device were 18-percent lower than a year ago. The CEO says that the broader smartphone market is sluggish.
The company hopes that the flashy new features of the upcoming Apple iPhone 7, which is expected to be introduced this September, will be able to convince customers to abandon their older mobile phones. Until that time will happen, the firm will probably face a further fall towards their revenue.
Perhaps the main challenge for the Tim Cook is whether the company will be able to have another product as successful as that of the iPhone, which is also the most lucrative within the tech sector to-date. Because of the report, and probably even before that, enthusiasm has waned for some of the company’s older products. Even the company’s famed tablet, the iPad, and also its newer models still remain niche offerings.
With regards to the company’s wearable tech, the Apple Watch, it had already celebrated its first full year on the market on the 24th of April. It has already sold more in its first year than that of the iPhone did back in the year 2007. However, consumers of today are better primed to purchase new gadgets than they were before. In other words, Watch sales could be made higher but one of the elements of the company’s wearable puts a lot of people off – its cost. The Watch starts at $300, in which a lot of consumers would just slowly back away from the product and look the other way instead.
Apple will only sell a mere 8-million watches in 2016, which can generate $4-billion in sales, as per Toni Sacconaghi of Sanford C. Bernstein, which is a research firm. A bright spot, however, in the company’s decline in sales is their services sector, as sales in that category is expected to grow steadily.