What is Apple’s strategy? How important is the iPhone to Apple, and what challenges are the company facing? How have the iPhone margins changed since 2007?
EXPERT ANSWER
Product differentiation is one of Apple’s business strategies. The international technology business, in particular, distinguishes its goods and services through a basic, yet appealing design and superior functionality. Apple has incorporated sophisticated features and capabilities of its goods and services as the foundations of its competitive advantage, according to its business strategy. Apple’s inventions include, but are not limited to, the launch of the iPhone, the very first device of its type that could hold thousands of songs as well as smartphone capabilities with something like a touch display, all of which were all incorporated using iOS.
All eyes will be on the increase of iPhone sales when Apple announces its June quarter earnings on Tuesday. In recent years, the iPhone has been the single most significant product fueling Apple’s company. Apple has been producing record-breaking sales and earnings since the debut of the iPhone 12 small, iPhone 12, iPhone 12 Pro, and iPhone 12 Pro Max last year, resulting in all-time high share values as well. This graph, created by Statista for us, demonstrates this point even more clearly. Since 2007, Apple’s iPhone revenue as a proportion of overall sales has increased dramatically, demonstrating the company’s ever-increasing reliance on its smartphone. For the foreseeable future, Apple will be the iPhone company. The gravitational pull of the iPhone is simply too powerful for any new product or service to escape velocity and become Apple’s next great thing in the foreseeable future. In the three months ending September 2020, iPhone sales remained modest coronavirus levels: the company’s most important product only brought in $26.44 billion in revenue. While the iPhone 12’s debut was definitely delayed, it had a detrimental influence on the current quarter. Nowadays that Apple’s newest phone has reached the stores, things should have been looking up. It’s yet unclear if the iPhone 12 will compensate for the segment’s significant revenue drop, or whether the iPhone’s relevance for Apple is declining in general.
As this infographic demonstrates, the iPhone’s proportion of overall sales has dropped significantly in the two most recent quarters, presently resting at only 41%. Apple set a new record for the fall quarter with $64.7 billion in total revenue. Despite this, the figure only grew by 1% annualised. The absence of an iPhone in the quarter removed the potential of significant growth, which disappointed investors. As a result, the stock market’s performance deteriorated.