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Apple’s iPhone sales peaked years ago, but the pieces are in place for a new


The Apple iPhone 12 Pro Max is unveiled during a virtual product launch.

Daniel Acker | Bloomberg | Getty Images

The iPhone hit its peak three years ago.

That’s when Apple reported its last blowout holiday quarter for the iPhone, selling more than 77 million devices that generated $61.1 billion in revenue. It’s been downhill for Apple’s iPhone sales ever since.

But the most bullish Apple analysts were nonetheless predicting a new “super cycle” for the iPhone ahead of the iPhone 12 announcement on Tuesday.

Apple’s last super cycle was in the fourth quarter of 2014, when it reinvigorated the iPhone lineup by introducing larger screens that matched rival devices from companies like Samsung. That quarter, Apple sold 74.47 million iPhones (up 46% from the previous year), generating $51.18 billion in revenue (up 57% from the year before).

Apple’s iPhone business has never seen that kind of growth again.

Revenue peaked in the fourth quarter of 2017, but even then it was only up 13% from the previous year, and unit sales dropped 1% — the increase in revenue was thanks to a higher average selling price, as Apple released its first $1,000 iPhone.

The bull case

So what’s with all the bullish calls for another super cycle given the iPhone’s lackluster (or negative) growth over the last three years? A few factors are working in Apple’s favor this time around.

Time for an upgrade: Analysts estimate that 30% or more of current iPhone owners are using a device that’s at least 3 years old. That’s a lot more people than are normally feeling the itch to upgrade in a given year.

Speed: The iPhone 12 series will be the first from Apple to connect to new 5G wireless networks that promise faster speeds for downloading and streaming, along with the potential for a new generation of apps that take advantage of the network.

New look: The new iPhone 12 has the first significant change to the look and feel of the iPhone since 2017 — it’s thinner and lighter than recent versions, with flat edges that hearken back to the iPhone 4, instead of slightly rounded ones introduced with the iPhone 6. That new blue color looks pretty cool to boot.

Pricing and segmentation. With the iPhone 12, Apple is offering more versions than ever, and the company stealthily increased the price of the baseline model, from $699 in the iPhone 11, to $799 or more for the iPhone 12. (There’s also a smaller iPhone Mini that starts at $699.) That segmentation increases the chance of having a suitable iPhone for every type of buyer, while likely raising the average selling price unless the Mini proves to be a runaway hit and sells more than the other versions.

All of that creates a chance for an iPhone sales jump like Apple last saw in 2014. At the very least, it could spur a revenue jump like 2017.

“It really comes down to if Apple can exceed the 231 million peak units from 2015. If they can, then this goes into the Cupertino hall of fame as a super cycle,” Wedbush analyst Dan Ives, who has been predicting a super cycle for months, told CNBC in an interview Monday. “If they can’t, then the disappointment will be reflected in the stock. The only way is to execute on the super cycle.”

The bear case

But a super cycle is far from a slam dunk. Here’s why:

Little compelling case for 5G. During Tuesday’s event, Apple started talking about 5G before it even mentioned the iPhone 12. Verizon CEO Hans Vestberg made an appearance to brag about his company’s 5G expansion across the United States. There was a lot of talk from Apple about data speeds and jargon like “millimeter wave” thrown around.

But the reality of 5G is that it’s not nearly as prolific as today’s 4G LTE networks. Even if you buy a 5G iPhone 12 this month, there’s a good chance you won’t be able to experience the top speeds Apple talked about.

In…



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