In an unprecedented move, Apple has suspended its activity in the stock market blocking the purchase or sale of shares coinciding with the presentation of financial results for the first quarter of 2019. The reasons have been explained by Tim Cook in a special letter to investors .
There was not a similar situation since 2002, when another letter – in this case, by Steve Jobs – revised expectations of downward income by 10% or 200 million dollars. Now the downward revision is 9,000 million dollars, but how did we get here?
Less demand for iPhone
The bells of a reduction in the reduction of the iPhone had been ringing for weeks, and now it is Tim Cook himself who confirms it: the iPhone is selling less than expected, especially in China.
This is blamed on the strength of the US dollars, to a smaller number of subsidies from operators to absorb part of the cost of the phones and in general to a smaller number of updates to a new iPhone model. In November, Apple had a big bump in bag after announcing that they would not disclose more figures of sales of their models, while some experts doubted that Apple could compensate the lower iPhone sales by increasing prices.
Change the battery is very cheap
Part of the reason why some users do not update to a new iPhone is, according to the letter from Tim Cook, because “some users are taking advantage of the discount in the replacement of batteries for iPhone.” That is, some people prefer to change the battery before buying a new iPhone.
These discounts referred to came caused by the controversy of the Throttling CPU, which reduced the speed of the system when the battery was degraded to maintain stability. However, many saw in this initiative some obsolescence programmed to return the slower iPhone and, therefore, in theory, encourage you to buy a new one. Apple ended up apologizing and offered a significant discount to replace degraded old iPhone batteries: 7,122.58 Indian Rupees passed to be 2,320.29r/s, a much more affordable figure.
Political tension with China
We can not underestimate the effect of political tensions, mainly between the United States and China, which have played a large part in 2018. The economy of the Asian giant began to decelerate as of the second half of 2018, with the smallest increase in the domestic product. gross in 25 years.
The truth is that during 2018 Apple was frequently in the eye of the hurricane in the US trade war with China, although Donald Trump promised that the iPhone made in China would not have special tariffs. In China, Qualcomm also put its two cents with the request to block iPhone sales.
In more concrete terms, Tim Cook mentions a lower affluence in Apple stores and affiliates in China and cites a reduction in the smartphone sales market in China.
It’s a matter of ‘timing’
Reducing the revenue forecast by 9,000 million dollars is not a trivial matter, and the temporary suspension of the stock market quotation testifies, but not all is bad news for Apple. Part of the reasons are technical, related to the moment in which the new models were launched.
While last year all initial sales of the iPhone X were concentrated in a single fiscal quarter, the iPhone XS and XS Max are divided between this quarter and the previous fiscal quarter. This makes the next quarter have lower sales because some of them have already been documented in the previous press conference.