Apple has owned up to what the industry has been whispering for weeks, that the smartphone industry is facing a slowdown right before the iPhone 15 debut in six weeks.
After Apple stocks dipped stemming from the release of slumping iPhone sales numbers, the company revealed that “the smartphone market has been in a decline for the last couple of quarters in the United States.”
Clearly this is a challenging market which is apparent with the latest iPhone numbers revealing a decrease of post-earnings of 2.4% to $39.7 billion last quarter, below Wall Street estimates.
Kieran Adams, Director of Hemisphere Business Consultants, who represents brands such as Shokz, said with Apple sales numbers slipping further, this will be one of the slowest iPhone launches we’ve seen.
Historically, Apple performs extremely well when new features are released like the iPhone 12 in 2020 and others before it, but this year’s market is a very different tech environment altogether.
Set to release the latest and greatest iPhone featuring substantial updates in three years and considering the newest iPhone is supposed to have an uptick in price, we’re wondering how this will all pan out.
Insiders believe the sales decrease will continue to dip further for Apple, which appears may have another tough quarter on the horizon, and, if predictions hold true, a 4th quarter decrease in sales would be its worse quarter since 2001.
Apple sales might rally for the holidays, but it’s up against consumers’ cutting spending to brace for further cost of living increases.
Additionally, retailers will also be hit with not only smartphone sales decreasing but also accessories and the entire smartphone ecosystem.
“Current sales aren’t really where they needed to be, which is evident in the market data of retailers like Harvey Norman and others. We’re seeing an obvious slowdown, and attach rates are down across the board,” he said.
Despite the obvious challenges the market faces, Adams said holistically, he is seeing green shoots of growth in the mid-tier phone market which he equates to affordability and having similar specs to premium options.
But when he refers to the iPhone launch, he shared the numbers won’t be where the tech giant had forecasted because of the consumer mindset and for many, their lack of disposable income.
“It comes down to is a consumer going to buy a new iPhone or pay the electricity bill?”
Even if the iPhone 15 has a lackluster launch, experts believe the newest Apple model could show a healthy year-over-year growth as long as production slowdowns are held at bay, but if Apple cannot control this, the smartphone downturn could spiral further.