Apple Will Seek Other Avenues of Generating Income in the Wake of Falling iPhone Sales – Services Could Be Its Primary Stop
Now that the demand for smartphones in general and iPhones, in particular, has peaked, and will continue to slide from here on, Apple will reportedly fall back on its alternative plan while suppliers might be left with a glut. Though the company could charge a higher price for its iPhones, there are several other categories where it can continue to generate a steady income.
As Demand for iPhone Ebbs, Apple Will Start Focusing More on Its Services Business to Generate Revenue
As the handset market saturates, and people hold on to their older phones for longer, Apple can charge higher prices for its products and generate an income stream from services such as data storage, digital videos, and streaming music.
To justify rising prices, Apple will continue introducing new features such as crispier displays and facial recognition tech. A lot of customers and critics might even think that the company is milking them but, on the other hand, longer product life could also indicate that customer satisfaction has increased. The iOS 12 upgrade was even rolled out to phones released back in 2013, which means a longer device lifespan could be a part of a well thought out strategy.
Now that Apple will stop reporting sales figures for its iPhone, iPad and Mac sales, analysts are sure that unit sales have gone down. However, revenue continues to grow and per Apple, sales figures are not all that relevant now given that Apple has expanded its portfolio.
Unlike suppliers who only get paid for their components once, Apple can continue to generate revenue from units sold through services. So if demands for iPhones go down, Apple could simply delay shipments and reduce components orders, which will prompt suppliers to reduce prices. It’s a win-win situation for the Cupertino giant.
Apple might rebrand itself as a services business which deals in hardware too. The company has already increased its focus on selling services such as cloud storage and apps. Some state that it might even come with a subscription plan of its own in the future with Amazon and Netflix-inspired tactics such as original programming and priority shipping.
You can check out our previous coverage related to Apple below.
- Apple’s iPhone XR Is Expected to Be a Winner, but ‘Slow Demand’ Has Made an Analyst Pessimistic
- Apple Dominates the U.S. Market, but None of This Year’s iPhone Models Were in the Top-Selling Category
- Intel Reportedly Spends $2 Billion Annually in Modem Development for Apple - Costs Expected to Increase With 5G Standard