Apple’s Weak iPhone Sales Report Brings India Back in Focus
iPhones aren’t getting cheaper, and buyers are clearly feeling the pinch.
iPhones aren’t getting cheaper, and buyers are clearly feeling the pinch.(Photo: @2shar/The Quint)

Apple’s Weak iPhone Sales Report Brings India Back in Focus

So, it’s not just Samsung and Google struggling to churn up the revenue figures over the past couple of quarters. Apple is facing a similar dilemma, now that iPhone sales have also weakened across the globe, which means focus on India needs to happen sooner than later.

Apple's sales are still shrinking amid weakening iPhone demand, despite the company's increasing emphasis on services designed to bring in a steady flow of money from the 1.4 billion of its devices still in use.

Revenue for the January-March quarter fell 5 percent from the same time in 2017 to $58 billion, the company said in its earnings report Tuesday. That downturn followed a 5 percent drop in the previous quarter.

It's the first time Apple has suffered two consecutive quarterly revenue declines in two-and-half years.

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Apple still posted a profit of $11.6 billion during its latest quarter, though that was down 16 percent compared to last year.

But even if the shares rise similarly during Wednesday's regular trading session, the stock will remain about 10 percent below its peak reached nearly seven months ago.

Questions still seem likely loom over the stock. Apple is continuing to grapple with challenges it hasn't had to confront since iPhone debuted 12 years ago, catapulting the company on to a head-spinning trajectory.

Apple Store in China. 
Apple Store in China. 
(Photo: iStockphoto)

Until recently, Apple could count on people eagerly lining up to buy its latest iPhone models at ever loftier prices. That's no longer the case, especially now that Apple is charging $1,000 (Rs 71,00 approx) and higher for its top-of-the line iPhones.

Also Read : Google Pixel Sales Fall Flat, But Nobody Else is Growing Either

Many consumers aren’t seeing enough compelling new features to persuade them to scrap their old devices for a new one.

That's part of the reason iPhone sales in its latest quarter plunged 17 percent from last year to $31 billion. Much of the erosion is occurring in China, where Apple is facing stiffer competition from homegrown smartphone makers Huawei and Xiaomi.

Services is the Way to Go

No wonder, Apple is slowly shifting its focus towards the services business, with more products to be added later this year.

Apple also is expected to launch a new video streaming service in the mold of Netflix, which has already amassed 149 million subscribers worldwide.

Cook previewed the service without disclosing how much it would cost during a celebrity-laden event last month. He touted it as an example of how Apple intends to continue make money from the iPhones, iPads and Mac computers it has already sold.

The Apple TV app receives a redesigned interface.
The Apple TV app receives a redesigned interface.
(Photo: Apple.com)

Also Read : Apple Launches Apple TV Plus, its Own Video Streaming Platform 

Apple already has attracted more than 50 million subscribers to a music streaming service it started four years ago. It's now is aiming to sign up tens of millions more to the video service, as well as others for video games and news.

The company's service revenue also includes sales of extended warranty programs for its devices, hefty commissions from apps that sell subscriptions and other digital goods through its App Store and fees that Google pays to be the built-in search engine on iPhones and iPads.

India is the Future for Apple

All this brings us back to the main discussion. Why isn’t Apple looking at India for growth of iPhone business. Tim Cook, CEO, Apple has repeatedly stated that doing business in India, in the short term will be a challenge, but it sees long term benefits from making the move.

For this, the company needs to set-up manufacturing/assembly plant for iPhones, which is likely to help in better pricing of the phones.

Also Read : Apple Will Start Mass Producing iPhones in India: Foxconn

Apple iPhone 6S. 
Apple iPhone 6S. 
(Photo: The Quint)
Cook and Co. have already got a teaser for that, and ever since the prices of iPhone XR were slashed, its demand also increased.

In addition to that, Apple needs to find an amicable solution with the Indian government to set up retail stores, to enhance the experience for the consumer, who’s willing to splurge big money.

Also Read : Apple to Kill Older iPhones, May Reposition 6S As Entry Phone

(With IANS and AP inputs)

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