The debate on whether ‘peak iPhone‘ is a temporary glitch or a longer-term problem continues, with Deutsche Bank analyst Sherri Scribner arguing the case for the latter view. Business Insider posted a graph suggesting that Apple’s year-on-year growth not only tracks that of the overall smartphone market – which is on a steady decline toward zero – but actually underperforms the market as a whole.
In a Fortune interview with Tim Cook, Apple’s CEO suggested that Apple is not yet committed to making a car, but is only exploring the idea at this stage. Asked by Adam Lashinsky why Apple wouldn’t comment on its plans given that it is known to have acquired a high-profile team to work on the project, Cook said hiring people wasn’t the point at which the company committed itself.
We don’t have to spend large amounts to explore. So I can’t talk about this certain area that you’re talking about. But when we start spending large amounts of money, we’re committed at that point. But we explore things with teams of people. And that’s a part of being curious […]
Once we start spending gobs of money—like when we start spending on tooling and things like that—we’re committed …
Lashinsky also asked how Cook responded to ‘peak iPhone‘ concerns …
After literally years of analysts claiming that we’ve reached ‘peak iPhone’ – that Apple’s year-on-year growth had gone as far as it could go – that day has finally arrived. iPhone sales last quarter were essentially flat (up just 0.4% year-on-year), and the company yesterday forecast that this quarter will see its first ever year-on-year decline in revenue since 2003.
If Apple hits the midpoint of its projected revenue for the current quarter, it will suffer a year-on-year fall in income of 11%. For the first time in 13 years, the ‘Apple is doomed’ merchants can cite real-life numbers as support for their position.
The reality, of course, is far more nuanced. There are some very specific reasons why the current quarter will be such a tough one, and why ‘peak iPhone’ is likely to be temporary, and I’ll get to those in a moment. But there’s also a bigger picture that suggests that Apple may have to be willing to think the unthinkable when it comes to the huge margins it has been able to enjoy to date …
