The groundbreaking iPhone almost single-handedly changed the way we use our phones. Introduced just 12 years ago in June 2007, it put the internet in our pocket and combined a host of individual devices, such as a camera and music player, into a single, indispensable unit. The smartphone was born, and since then, it has never looked back, at least until now.
The iPhone was slow to get going, with just six million first generation phones sold in the first year and a quarter, but it soon took hold. By the end of 2010, 73.5 million iPhones had sold, and by the start of 2014, Apple sold 51 million phones per quarter. For a long time, the iPhone has seemed unstoppable, but high prices, difficult overseas trading, and potential consumer saturation have seen sales start to drop in recent months. So, has the iPhone bubble burst or is this only the perfect storm of circumstances?
Sales Struggle Overseas
Sales of the iPhone dropped by record numbers in the first quarter of 2019, down by 17 percent on the previous year, forcing Apple to issue its first profit warning for many years. A CNN report said that “lackluster smartphone sales were dragging down Apple’s business,” and investors responded with a significant sell-off, which took the company share price down by as much as 20 percent at one point. Some of this drop was domestic. However, the biggest drop was overseas, as the dollar strengthened, making the expensive new phones even more pricey, and especially in China where the China-U.S. trade war also started to take its toll. As a result, iPhone sales in China were down 21 percent, which is significant when you consider that the Greater China region accounts for almost 20 percent of Apple’s global revenue.
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For many years, Apple has got away with steadily rising prices, but it seems that customers may have finally had enough. Four-figure price tags for the top models, combined with far fewer subsidized deals, put many off from upgrading to the latest model despite Tim Cook describing the newest phones as “by far the best iPhones we’ve ever shipped.” Many customers chose not to upgrade this time around, instead of taking advantage of Apple’s $29 battery replacement program to prolong the life of their existing phone rather than spending hundreds more for a whole new phone.