iPhone Sales Face First Decline Since 2007; Is the iPhone 5e On the Way?
For years, Apple has been making a killing with their iPhone handsets. In 2014, the iPhone 6 and the 6 Plus broke all opening weekend sales records with 10 million sold. As if that wasn’t enough to write home about, the electronics maker did it again in 2015, as the iPhone 6S and the 6S Plus had an even better opening sales weekend, managing to shift 13 million units between them in just a matter of days.
But these astonishing records are now being met with some concern from investors, as Apple’s iPhone shipments are now facing their first year on year decline since the massively popular handset line debuted in 2007. That’s the word from American investment firm Piper Jaffray, which has recently adjusted their estimates for Apple’s current quarter of iPhone shipments. The firm says that instead of their original estimate that 62.5 million units will have been shipped by the end of the quarter (which is at the end of March), their projected figure has dropped by 12% down to 55 million units. If less than 61.17 million units have been sold, it will be the first year on year decline in iPhone history.
Moreover, the firm’s estimate for the next quarter has also been slashed, down to 45 million from 48.5 million, and Piper Jaffray aren’t the only ones to trim their figures either. Morgan Stanley, J.P. Morgan, and more have all dropped their figures and the reason seems to stem from the recent reports that Apple has decreased their orders for iPhone parts. Japanese publication Nikkei recently reported that suppliers are suggesting that iPhone 6S parts orders could be as much as 30% lower.
In a note to investors, Piper Jaffray analyst Gene Munster said that while “Apple has repeatedly stated in the past that the changes in orders from any given supplier are not indicative of the health of the iPhone business overall,” they believe that “the combination of three supplier guidedowns (Dialog Semiconductor, Qorvo and Cirrus Logic) as well as the Nikkei story suggesting production cuts from last week are too much collective evidence to not adjust iPhone expectations.”
With all this said, though, it’s not as though Apple is about to become a sinking ship any time soon. Not only does Munster predict that the iPhone will return to 5% year on year growth in the quarters ending September/December (when the iPhone 7 is expected to make a debut) but rumors have also been circulating regarding the iPhone 5e.
According to (unconfirmed reports) the iPhone 5e will be a 4-inch device that Apple will position positioned as an ‘entry level’, offering a smaller solution for those who find the 6S/6S Plus’ sizes to be cumbersome. It won’t come cheap though, as some are suggesting that the 5e (which could come with 2GB of RAM and the A9 processor) will sell for $500.
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