Apple Inc. missed iPhone sales expectations in its recently announced quarterly results, and CEO Tim Cook blamed the slowdown on the iPhone 8 rumors. Now iPhone 8 sales have to fare really well to ward off that pressure on the company in the face of sluggish iPhone sales.
Why Apple needs the iPhone 8?
“We’re seeing what we believe to be a pause in purchases of iPhone, which we believe is due to the earlier and much more frequent reports about future iPhones,” Cook said during the earnings call last night. Analysts believe the simplest theory could be that users are holding off on buying new devices until the fall.
In the last quarter, the Cupertino-based company sold 50 million iPhones, a drop of 1 million from the same period last year. Street expectations were 52 million units. The CEO acknowledged that the company failed to correctly estimate the popularity of the iPhone 7 Plus against the iPhone 7, which caused some supply issues as well.
Apple posted strong profits fueled by its services unit in part, reporting earnings per share of $2.10 against the expected $2.02. However, iPhone sales were below expectations. The company’s outlook is also nothing to boast about, and this was reflected in its stock price in after-hours trading as well. The stock was down 1.6% in after-hour trading.
Sales in the United States increased 11%, but the company saw a drop of 14% in China. However, Cook feels there is no need to worry about the sales numbers in China and that the results were in line with those of the previous year. Further, Cook stated that seven of Apple’s most popular stores are in China. But whatever Cook might say, the fact is that local manufacturers such as Huawei are eating into Apple’s market share there.
Apple is also facing competition for its MacBooks, as on Tuesday, Microsoft revealed a sleek new laptop for students that’s designed to compete with the MacBook Air. Sales of the iPad also continued to slide during the most recently completed quarter.
Will the iPhone 8 come in time?
Rumors and analysts agree that Apple will launch three new iPhones this fall, including a high-end device which will cost as much as $1,000. However, there are also reports that the high-end version could be delayed, as the company is apparently baking in a host of new features such as augmented reality, a new bezel-less design and so on. Sources from Apple’s suppliers in Asia also suggested to ValueWalk that the iPhone 8 might not come this year, and the rumors we’ve heard since then are appearing to back up what our sources told us.
Overall, analysts are upbeat about Apple’s future, and they have every reason to do so, given the loyalty of its customers and its reputation. Clement Thibault, a senior investing analyst with Investing.com, told ValueWalk that they are bullish on the company’s outlook for three reasons: expected upgradability of its devices, its ecosystem stickiness and popularity among teenagers.
On Tuesday, Apple shares closed up 0.63% at $147.51. Year to date, the stock is up more than 27%, while in the last year, it is up more than 57%. The stock has a 52-week high of $148.09 and a 52-week low of $89.47.