Behind Apple’s disconcerting news of weak iPhone sales lies a more sobering truth: The tech industry has hit Peak Smartphone, a tipping point when everyone who can afford one already owns one and no breakthroughs are compelling them to upgrade as frequently as they once did.
Some manufacturers have boosted prices to keep up profit. But Apple’s shortfall highlights the limits of that strategy. The company said demand for iPhones is waning and revenue for the last quarter of 2018 will fall well below projections, a decrease traced mainly to China.
Apple’s shares dropped 10 percent Thursday on the news its worst loss since 2013. The company shed $74.6 billion in market value amid a broader sell-off among technology companies which suffered their worst loss in seven years.Experts argue that sales are slow because iPhones are getting more and more expensive while offering fewer and fewer new, innovative features that I’ll actually use.
Samsung has been hit even harder as its phone shipments dropped 8 percent during the 12 months ending in September.iPhone is a tough sell to Chinese consumers unnerved by an economic slump and the trade war with the U.S. They also have a slew of cheaper smartphones from homegrown competitors such as Huawei, Xiaomi and Oppo to choose from.
After a steady rise for a decade, worldwide smartphone shipments fell 3 percent to 1.42 billion in 2018, the first annual drop, according to International Data Corp., which tracks such movements. IDC estimates that shipments will rebound 3 percent in 2019 to 1.46 billion, but that still falls short of 2017 levels.