Apple boss Tim Cook has suggested the tech company could lower iPhone prices in some markets in a bid to boost sales.
News of the possible price change came on Tuesday, January 29 as Apple announced iPhone revenue of $51.9 billion for the most recent holiday quarter, marking a 15-percent year-on-year decline.
Apple is considering lowering the cost of its handsets because the strong dollar has made the devices more expensive when converting to local currencies, Cook told Reuters this week.
“As we’ve gotten into January and assessed the macroeconomic condition in some of those markets, we’ve decided to go back to more commensurate with what our local prices were a year ago in hopes of helping the sales in those areas,” the CEO said while declining to offer specific details on new pricing.
Apple posted total revenue of $84.3 billion for the quarter ending December 29, 2018 — a decline of 5 percent from the same quarter a year earlier. It was Apple’s first decline in both revenue and profit in more than a decade.
The confirmed slowdown in iPhone sales had been expected as Tim Cook had already warned investors at the start of January. In a letter published on January 2, the Apple chief cited pressure on the global economy and Apple’s failure to “foresee the magnitude of the economic deceleration, particularly in Greater China” as factors affecting sales, as well as the aforementioned strong dollar. He added that sales had also been hit by customers “taking advantage of significantly reduced pricing for iPhone battery replacements,” which resulted in fewer people upgrading to the latest iPhones.
Notably, there was no mention of the increasing competition from Chinese rivals. Huawei, for example, sold 200 million phones (includes sister brand Honor) in 2018, making it the second biggest smartphone manufacturer globally, with Samsung and Apple placed first and third, respectively. With growing pressure on the global smartphone market, Apple and its rivals clearly face serious challenges to maintain healthy handset sales.
Brighter spots in Apple’s quarterly results included a 19-percent year-on-year rise for revenue from all products and services after excluding the iPhone.
Services revenue, which includes the App Store and Apple Music, reached an all-time high of $10.9 billion, up 19 percent over the previous year. In addition, revenue from Mac computers and wearables increased by 9 percent, with sales of home devices and accessories rising by 33 percent, the company said. Revenue from iPad sales increased by 17 percent on a year earlier, with sales boosted by new additions to its tablet lineup in 2018.
