Apple Inc’s recent forecast reports its first revenue drop in over 13 years, reporting the slowest ever increase in iPhone shipments worldwide.
The once mighty leader in the realm of technology and innovative phones reports that the low growth is due to critical Chinese markets showing signs of weakening, but there seems to be another reason why the tech company’s period of super-growth is ending.
The Slowdown Begins
Wall Street analysts report that the company’s slowdown may be attributed to the lack of a new blockbuster product to replace the iPhone, which seems to not have aged well since the last few that came out. Apple has not yet made a full report on their Watch sales, but it is evident that they are not raking in the same profits as the iPhone.
Indeed, the Apple Watch seems to be more of a dud than the next blockbuster hit from Apple. There are reports that Apple may be working on a car, but it is still unsure what its plans are in the automotive industry, or if it will boost growth the same way the iPhone did a few decades ago.
The End of an Era?
Apple’s shares have fallen by over five percent this year alone, and while it did bounce around during the after-hours of trading, it was again down by more than 2.6 percent.
J.J. Kinahan, chief strategist at TD Ameritrade says that “It’s disappointing to see them miss on an already downward adjusted sales number and the fact is that with their iPhone growth slowing what was needed was a product to be excited about.”
He added that, “Pressure on the shares will continue without a well-defined plan to grow sales or a new product.”
Apple reported on Tuesday that it sold around 74.8 million iPhones during its first fiscal quarter, which ended last December 26. This already includes the first full quarter sales of both the iPhone 6S and the 6S plus. Analysts say that the 0.4 percent growth in shipment was the lowest ever since the iPhone was first launched back in 2007.
Tim Cook, Apple’s Chief Executive Officer, said in a conference call with investors that iPhone sales were expected to fall for the current quarter compared with the same quarter last year.
The room for growth, seems to be far off now though as over sixty percent of iPhone users prior to the launch of the new iPhone 6 have yet to upgrade to the newer models. These trends seem to be spelling the end of an era for Apple.
Daniel Ives of FBR Capital Markets & Co., however, said that that Apple’s dipping performance was “slightly better than feared.” The company continues to be the most profitable within the S&P 500, and the most valuable publicly traded U.S. tech company.
Analysts say that all it needs is another innovative piece of technology to get it through its current dark ages. Will there be another Apple renaissance in the future? Only time can tell.