Apple faces headwinds to make a financial success of the iPhone 15 in today’s tough economic conditions.
Court cases, edicts from China, supply line questions and the state of the global economy and the smartphone market in particular head concerns that it will need to overcome.
While the iPhone 15 range sports some great features, will they be enough to encourage users to ditch recent model iPhones and gravitate to this year’s models? Or will Apple depend more on devotees ditching older models near end-of-life?
Today’s launch came as Google fronted an antitrust case in the US on the question of whether it should continue to pay to have Google Search as the dominant search engine on phones, which the Justice Department says is a monopoly.
The Wall Street Journal has reported that Google pays Apple $8 billion to $12 billion annually for the privilege of being the default search engine on all Apple devices. It doesn’t have anything directly to do with today’s iPhone launch, but it’s part of the backdrop surrounding it.
Apple also faces an ongoing battle to offset reductions in revenue from its device sales with gains in income from its services – music, iCloud, gaming and Apple TV+ to name a few. It’s a trajectory that CEO Tim Cook has been keen to execute.
Apple will need to get a further wriggle on with The Wall Street Journal last month reporting a revenue decline for the third consecutive quarter, “the company’s most prolonged sales slump since 2016 as the iPhone-maker continued to deal with declining demand for consumer devices”, it reported.
iPhone sales fell 2.4 percent to US$39.7 billion, missing analysts expectations of US$40.2 billion in iPhone revenue, it said.
There’s the recent edict from China’s government, which bars government employees from using iPhones, coupled with China phone maker Huawei announcing the Mate 60 Pro which uses chips that are said to be better than anything the phone maker has produced before, despite the US ban on foreign companies supplying it with semiconductors.
Does it mean Apple’s 20+ percent share of China’s smartphone market will go to mush?
The world’s economic woes means consumers are less likely to buy expensive new phones and will retain their existing handset for a year or two longer. This applies to all smartphone vendors, but Apple is especially vulnerable as its phones are at the expensive end of the market which could face a more marked turbulence.
Analyst firm IDC projects a 4.7 cent decline in phone sales in 2023 generally.
It’s not all bad news for Apple. IDC also expects Apple iOS shipments to grow 1.1 percent in 2023 and to reach an all-time high market share of 19.9 percent, as it says the iOS mobile operating system continues to remain more resilient to macro challenge.
In response, Apple appears to have ordered fewer iPhone 15 handsets compared to iPhone 14.
DigiTimes in Asia reported this month that Apple had ordered 80 to 90 million smartphones for its iPhone 15 series from the supply chain for the second half of 2023 in August, down from the 90 to 00 million for the iPhone 14 series for the second half of 2022.
“Within the orders, the iPhone 15 Pro Max owns the highest share, followed by the iPhone 15 Pro, the iPhone 15, and the iPhone 15 Plus,” DigiTimes Asia says.
It says Apple has diversified its iPhone Pro Max supply away from a reliance on Foxconn to also using China-based Luxshare and a portion of 15 Pro manufacture has been given to Pegatron.
Apple announced impressive statistics on its move to net zero. It had planted forests in Paraguay and Brazil, reduced water usage by 63 billion gallons (227 billion litres), and Apple offices operated on 100 percent clean energy.
It says by 2030, all Apple devices will have a net zero impact and be carbon neutral with 100 percent recycled metals, and 100 percent recycled cobalt in the battery. It says it will eliminate plastic from packages by the end of 2024.
The pledges includes a reduction in shipping devices by air and an increased reliance on cargo vessels. Hopefully that will not impact Australia and won’t add to concerns about iPhones getting to market here on time.
The company seems confident about announcing general availability of all models by Friday week, but we’ll have to wait and see if supply remains high.
