Your favourite iPhone might become cheaper: Apple considers lowering iPhone prices

Your favourite iPhone might become cheaper: Apple considers lowering iPhone prices

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Apple revealed in its latest economic results a brutal decline in sales of the iPhone, its flagship product.

The executive director of Apple, Tim Cook, has declared that the company could lower the price of the iPhone in some countries.

It is one of the solutions that the company proposes to deal with a phenomenon that some analysts have been warning for some time: iPhone sales are plummeting.

The latest economic results of the last quarter, announced on Tuesday, show that revenues from Apple smartphones fell by 15% compared to last year.

It is the first time that the benefits that the company obtains through the iPhone have been reduced since this device came onto the market, more than a decade ago.

In total, the company’s revenues fell by 5% compared to last year and amounted to US $ 84,300 million. It is the first quarterly fall of the company since 2016.

Apple already expected that fall, so he made a warning to his investors earlier this month in which he blamed China: “We did not know how to predict the magnitude of the economic slowdown , especially in China,” Cook said earlier this month. .

Emerging markets

But the director of the company has declared this time that the high prices of the iPhone are posing a problem for its customers.

He said that the strength of the dollar, which makes its products comparatively more expensive, damaged its sales in emerging markets.

Cook also said that the technological giant began this month of January, considering lowering the price of its smartphones to protect its customers from currency fluctuations.

“What we did in January in some areas and (for) some products was, basically, absorbing partially or totally foreign currency movements, compared to last year,” he said.

However, Apple executives said they expect the firm to continue facing new challenges.

Apple forecasts revenues for the first three months of the year – up to March 31 – of US $ 55,000 million, which suggests a fall of at least 3.4% in year-on-year terms.

“The macroeconomic environment, especially in emerging markets, will continue to be there,” said Luca Mestri, Apple’s CFO.

Apple is not the only company that has this problem. Worldwide shipments of smartphones were down 5% in 2018, according to data from Canalys, a market research firm.

But Apple’s share price has fallen by about a third since October, amid investor concerns about customers’ lack of interest in buying new iPhones.

iPhone
Copyright of the image DAVID PAUL MORRIS / GETTY IMAGES
Image caption The golden age of the iPhone may be coming to an end.

“Strength”

The fears intensified when the firm said it would stop reporting the number of iPhones, iPads and Macs sold each quarter.

However, Apple shares rose more than 4% on Tuesday during the so  called after-hour trading (orders shipped after the close and that are executed the next day), which proves that the firm resisted more than expected.

Quarterly sales fell more than 25% from last year in the China region , where Apple includes areas such as Hong Kong and Taiwan.

In Europe, that figure was 3%,

But in the United States the firm remains strong : its sales rose by almost 5%. Therefore, a drop in iPhone prices would not affect that region.

Revenue from other services also increased by 19%, adding a record of US $ 10,900 million in that quarter, which ended on December 31.

Cook said he has confidence in the company, highlighting strong iPad sales , Macs and services such as Apple Pay.

“Although it was disappointing to lose our sales estimates, we managed Apple in the long term and the results of this quarter show that the strength of our business is deep and broad, ” he said.

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