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Did iPhone 6s proved a fortune or a headache for Apple Company

iPhone 6s was launched on 25th September 2015. Like every previous brand, expectations were high from this iphone model. It has got improved speed, faster processors and better cameras. Another security improvement was the introduction of touch ID sensors. However, battery life is the same as previous model.

The Apple company in 2003 that was not much recognizable have now reached new heights in term of its technology, market share and profits. The profits surged to $200 billion/year. However, currently the warning signs are appearing on Apple financial statements after the release of iPhone 6s. iPhone sales previously have never declined; but, for the first time in Apple’s history, iPhone sales declined in 2016 as compared to previous year. The story did not ends here. The company’s management recently has also raised alarms that the next quarter is expected with similar trend. The sales of iPhone came below the expectations. The inventory loss of iPhone 6s is also something that Apple has to bear in future. Although the inventory will be adjusted, but it will cost Apple nearly $2 billion. Optimists are looking towards iPhone 7 as the savior for its balance sheet. However, critics are also giving frightening indications that iPhone 7 can also face such issues.

The sales of iPhone 6s declined between 15-20% in 2016. Few sources in Apple supply also said that orders for iPhone components decreased after the launch of iPhone 6s. According to some inside people, Tim Crook (Apple CEO), during the conference call of first quarter of 2016 claimed that iPhone sales will not decline by more than 15%. However, the decline remained between 15-20%.

The question appears now that why iPhone sales is showing such unusual behavior. Narrowing it down, it all comes to supply and demand gap. According to some senior analysts, all of this is the result of volatile currency and world economic slump. iPhone model predicted previously that iPhone users updated/changed their phone after every two years. However, the real signs are showing that this assumptions is wrong. The further analysis show that iPhone upgrade by users is expectedly done after every 3 years.

One of the other main reason is that mobile carrier expansion has slowed down across the world. In 2014, China mobile began selling iPhone for the very first time in China. It resulted in boom of the iPhone. Never in the history does iPhone experience such record sales. However, now the carrier market has slowed down.

Secondly, India was expected as the next China in terms of iPhone sales. However, stats clearly showed that Indian people do not have high paying capacity that can make them a big buyer for Apple products.

Thirdly, not many users are switching from android to Apple. Previously, iPhone was considered as a niche product and it had a very little competition with android high quality phones. However, situation has changed by now. Many cellular companies like Samsung, Hawaii, HTC are producing high value added phones and the shift from android to Apple has declined.

Apple surely has iPhone growth problem. However, innovation is its key that keeps Apple on top of every brand. Apple is planning to enter other wearable markets e.g. watch etc and it planning to create demand soon for his products. It will help the Company to maximize its overall profit.

However, innovation is also required in Apple Smartphone segment so that this developing headache for the company can be turned back into fortune again.

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