In its Q1 2019 financial report today, Apple has revealed that the revenue from iPhone sales has dropped 15% compared to the same period in the previous financial year. The drop is rather significant since it affects the company’s total quarterly revenue even though there was an increase in sales revenue from other Apple products.
In his statement during Apple’s Q1 2019 earnings conference call, CEO Time Cook pointed that customers are now holding on to their older iPhones for slightly longer than they did in the past. Among the reason that contributed to this behavior especially in emerging markets is foreign exchange which has made Apple products more expensive than before.
Adding on to that is the fact that iPhone subsidies are becoming a lot less common. Using Japan as an example, Cook described the increasing restriction of subsidies due to regulation. this resulted in less than half of iPhones sold in the country that were subsidised, compared to about three quarters a year before.
Of course, there’s the matter of the battery replacements as well. It provided a way for iPhone users to hold on to their current devices, rather than get a new one come the upgrade cycle. All these factors put together resulted in the 15% revenue fall.
iPhones aside though, Apple’s other businesses grew by 19%. This applies to nearly all other markets outside of China, which includes Southeast Asia and, by extension, Malaysia.
Speaking of the Chinese market, Cook stated that revenue in Greater China was down by US$4.8 billion (~RM19.7 billion), with declines across iPhone, Mac and iPad products. All these factors contributed to the five percent decline compared to the year-ago quarter.