Apple’s iPhone business shows signs of life

“Back on January 2nd, Apple negatively pre-announced its earnings results for the first quarter of fiscal year 2019, as iPhone sales — particularly in the Greater China region — fell substantially short of expectations and saw a year-over-year sales decline,” Ashraf Eassa writes for The Motley Fool. “That decline continued into the company’s second quarter, with Apple CEO Tim Cook saying on its most recent earnings call that iPhone revenue dropped 17% year over year during that period. Although a 17% decline is pretty awful, there were some potential bright spots for the company’s iPhone business that suggest signs of life. Let’s take a closer look. ”

“According to Cook, the year-over-year declines in the company’s iPhone revenue ‘were significantly smaller in the final weeks of the March quarter,’” Eassa writes. “Later on in the call, Cook went into some more detail on these improvements that helped to shore up iPhone results in China, the region that has been most problematic. One factor that helped to boost the company’s Greater China iPhone performance, per Cook, was that Apple ‘made some price adjustments essentially backing out the weaker currency effect.’”

“The executive also explained that the Chinese government initiated some ‘stimulus programs’ such as reducing the value-added tax (VAT) rate from 16% to 13%, ultimately translating into more accessible prices for consumers. Third, Cook said that ‘our trade-in and financing programs that we’ve implemented in our retail stores have been very well received there, and I’m happy with the results to date there,’” Eassa writes. “And finally, he highlighted ‘an improved trade dialog between the US and China’ as something that has ‘affected consumer confidence on the ground there in a positive way.’”

Read more in the full article here.

MacDailyNews Take: Just an FYI:

Apple sold 217.72 million iPhones in 2018, up from 216.76 million in 2017, and up from 211.88 million in 2016.

The replacement cycle is lengthening*, but Apple will still sell some 200 million iPhones per year.

*Until everyone and their mother upgrades with the first 5G iPhone in 2020.

Apple cuts prices on iPhones, iPads, and Macs in China after value-added tax cut – April 1, 2019