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Why Apple considers iPhone price cuts

January 30, 2019, 7:02
Updated January 30, 2019 at 19:05

Apple CEO Tim Kuck has announced that the company may lower the price of iPhone in some countries.

This is one of the solutions the company proposes to deal with a phenomenon that some analysts have been warning for some time: iPhone sales are falling.

The latest quarterly economic results announced on Tuesday show that Apple smartphone revenue fell by 15% compared to last year.

This is the first time a company has gained from using the iPhone since its launch, more than a decade ago.

Overall, the company's revenue fell by 5% compared to the previous year and reached $ 84,300 million. This is the first quarterly drop in the company since 2016.

Apple was already expecting it to fall, so he warned his investors this month, in which he blamed China: "We didn't know how to predict the size of the economic downturn, especially in China," said Coke earlier. .

New markets

But the CEO said this time that high iPhone prices are a problem for their customers.

He said that the strength of the dollar, which makes its products more expensive, has damaged its sales in new markets.

Cook also said that the technological giant started in January this year, considering a downgrade of smartphones to protect customers from currency fluctuations.

"What we did in January in some areas and in some products, mostly, partly or completely absorbed foreign exchange movements compared to the previous year," he said.

However, Apple executives said they expect the company to continue to face new challenges.

Apple expects revenue for the first three months of the year – up to March 31 – at $ 55,000 million, showing a decline of at least 3.4% year-on-year.

"The macroeconomic environment, especially in emerging markets, will continue to exist," said Apple CFO Luca Mestri.

Apple is not the only company that has this problem. According to the market research firm Canalys, global smart phone shipments fell by 5% in 2018.

But Apple's share price has fallen by about a third since October, as investors are concerned that customers are not interested in buying a new iPhone.

The iPhone's golden age may end. Photo: DAVID PAUL MORRIS / GETTY IMAGES

The iPhone's golden age may end. Photo: DAVID PAUL MORRIS / GETTY IMAGES


Fear intensified as the company announced that it would stop reporting quarterly sales of iPhone, iPad and Mac.

However, Apple's shares rose by more than 4% on Tuesday during the so-called after-hours trading (orders postponed and executed the next day), proving that the company resisted more than expected.

Quarterly sales fell by more than 25% from last year's China region, where Apple includes such areas as Hong Kong and Taiwan.

In Europe this figure was 3%

In the United States, the company is still strong: its sales grew by almost 5%. That's why iPhone prices would not affect this region.

Revenue from other services also increased by 19%, with USD 10,900 million recorded in the same quarter ending 31 December.

Cook said he had confidence in the company, highlighting the strong iPad sales, Mac and services like Apple Pay.

"Although it was unsatisfactory to lose our sales estimates, we managed Apple in the long run and the results of this quarter show that our business strength is deep and broad," he said.

Apple's shares have fallen for several months. Photo: GETTY IMAGES

Apple's shares have fallen for several months. Photo: GETTY IMAGES

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