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Apple's iPhone X Success Hides Bad News

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This article is more than 6 years old.

Revenue is up! Profit is up! The iPhone X is the best-selling iPhone every week it is out there! Apple is… safe? Hiding behind that story are numbers familiar to those who know their smartphone history and the answer is no, Apple is not safe, but neither is it in a terminal position. The question is, will Tim Cook react in time?

The numbers come from Gartner, which has been tracking smartphone sales since 2004. For the calendar year of 2017, Apple sold 214.9 million smartphones. For calendar year 2016, 216 million smartphones. That’s a drop of 1.1 million smartphones. If you go back to 2015, the slide is even more pronounced, with 225.8 million sales. Since 2015, iPhone sales have steadily fallen.

Even with this year’s debut of the iPhone X, its new OLED screen, the facial recognition and wireless charging, iPhone sales have continued to drop. Three new models introduced to replace two, plus the iPhone SE price cut to just $349 as the lowest entry-point into the iPhone family for many years, and iPhone sales dropped. With all of Apple’s marketing power, fanatical supporters, and love from the mainstream media, iPhone sales dropped.

Yes, Apple saw its revenue rise in the fourth quarter of 2017 and it saw quarterly share earnings rise. But sales of its key product continued to fall. Oh and that fourth quarter? 2017 saw 73.1 million sales, while Q4 2016 saw 77 million sales. Almost four million sales lost from two quarters that both ended in the last week of the calendar year.

There will come a point where Apple's CEO will have to decide that the falling sales have reached a critical limit and Tim Cook will have to trade away the high margins, the rich revenue, and the precious profit of the iPhone to preserve the future of the platform .

Nokia waited too long in the days of Symbian. Palm waited too long. Motorola, Siemens, and other trend setters all gorged on profits and became too slow to react as sales and revenue fell away at an increasing rate. They were not saved by high marketing speeds, new innovations in product lines, or bolstering the existing offerings as a financial base to protect themselves against new entrants.

Why should Apple be any different? How late will Cook leave it before realising the drop is already happening?

Now read why the falling iPhone X sales is a problem for Samsung to deal with...

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