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Apple Profits Slump as Company Blames Low Demand for the iPhone in China

The latest news from Apple, a U.S.based multinational technology company reveals that its sales have dwindled over the past five months. This decline has been attributed to the expensive price tag of the iPhone, the low demand for the smartphone in China, and users unwillingness to upgrade to a higher model, reports the New York Times of January 29.

Apple Records a Decline in Profits

Apple, a manufacturer of smartphones and hardware devices has recorded a decline in income within the past five months. Reports reveal that Apple is the first American company to have hit a milestone of over $1 trillion dollars. However, the returns it has gotten of late can be compared to that of its competitors, if not less.

Specifically, total revenue of $84.3 billion was raised for the quarter and this accounts for a 5 percent decrement to what was obtainable last year. In the same vein, the revenue generated from the sales of iPhones is $51.98 billion, which is a 15 percent loss from last year’s turnover.

Profit Slump Attributed to the Chinese Market

According to reports, this decline in income can be attributed to the Chinese market where a larger part of Apple’s customers is found. In this case, the people in this region have turned to less expensive smartphones that are also made in China, such as Huawei. These are devices that are offered at less than $1,000 in comparison to the price of the latest iPhone X.

NYTimes also revealed that while in an interview with Luca Maestri, Apple’s chief financial officer, he blamed the low profits on the reluctance of its customers to upgrade their phone. According to him, some people have found a way to use cheaper batteries on their old iPhone which extends the battery life of the device.

Lack of an Impactful Product Like the iPhone

In line with that, the dwindling profit has been pinpointed on the lack of a product that will significantly impact on the market as was the case of the first iPhone 10 years ago. Nonetheless, the Apple Watch has been said to gain the attention of people even though at this time, it has not impacted majorly on the company’s income.

The media outlet also noted that the low turnover could be as a result of a vulnerability that was discovered in the iPhone. Here, an iPhone user could call another person also using an iPhone and the caller can listen in on their conversation. Also, irrespective of whether the call has been picked, the details of the conversation can be heard by the listener through the phone’s microphone.

Nevertheless, NYTimes has pointed out that the company may have a bit more of cud to chew if Donald Trump, the U.S. President places a tariff on smartphones that are made in China. This policy will definitely apply to Apple given that most of its devices are made in East Asian Country.

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