From the day late Steve Jobs pulled out the iPhone for the first time during the 2007 Mac World event till date, Apple inc. has experience smartphone sales in a manner many have described as “unprecedented in corperate history”. To put it more succinctly, since the iPhone was launched, in terms of sales growth, the iPhone has known only one way – UP! In less than ten years (2007-2015), the iPhone has grown from zero to more than $150 billion in annual sales. In the fourth quarter of its 2015 fiscal year alone, Apple earned about 32 billion U.S. dollars in revenue from the sales of iPhones only. The Cupertino based tech iant hit a record 13 million iPhone 6s and 6s plus sales in just 3 days. It’s no news that the iPhone is Apple’s single largest revenue earner, trumping all other Apple products by a huge margin. However, not every bedtime story earns with “and they lived happily ever after”. Apple’s Case is unfortunately not any different. Now the questions that beg an answer — Is Apple’s iPhone finally reaching its peak? Has Apple exhausted its magic card with the iphone? In terms of sales, what does the future hold for the iPhone?
In the past few weeks, a handful of analysts have predicted that sales of Apple’s best-selling product may slump in 2016. Analyst have based their assumptions in part on supply chain issues and also partly on weaker demand, especially from saturated developed markets.
Image credit: Statistica.com || Chart shows a potential decline in iPhone sales
According to a research note published by Morgan Stanley, 2016 may be a not so “phenomenal” year for the iPhone. According to Apple’s unintended but well accepted tradition — the company ‘must’ record sales figures higher than the previous year. Meaning sales in 2009 must be higher than previous year 2008 and sales in 2008 must be higher than previous year 2007. However, Apple inc is unintentionally likely to break the years spanned sales pattern. Morgan Stanley predicts Apple is going yo sell 218 million iPhones in fiscal year 2016. This would be equivalent to a 5.7 percent drop compared to the fiscal year that ended in September with an all time high iPhone sales of 231.2 million units. The bank’s analyst’s believe smartphone penetration and higher prices in international markets as possible reasons for the anticipated never-experienced decline in iPhone sales.
Another bank — JPMorgan Chase & Co. also published a report on December 13
in which it said that “November sales signal signs of early weakness of iPhone 6S cycle.” The bank went ahead to lower its forecast for iPhone units to 75 million – 77 million in the fiscal fourth quarter, down from a previous prediction for 75 million – 80 million units. Credit Suisse reported in a Dec. 1 note that Apple lowered its component orders in November, suggesting weak demand for the new iPhone 6s. Suisse cited “subdued” iPhone cycle for the next few quarters, but however reiterated that the installed base of iPhone users will grow over time. Drexel predicts iPhone units to grow 4 percent year-over-year in the first quarter of fiscal 2016 and decline by 4 percent in the second quarter. 2016 is around the corner and with hard-to-take predictions from a slew of analyst, Apple sure has the forces of demand and supply to contain with. Should Apple sell 218 million iPhones in 2016 as predicted by Morgan Stanley, it won’t be very bad. In fact it would still be a very successful year but it probably wouldn’t be enough to satisfy the Apple’s shareholders who are accustomed to expecting each year to be better than the previous.