Apple has a plan to help combat slacking iPhone sales in some international markets, but it may take a bit more than that to right the iPhone ship.
Following Apple’s latest quarterly earnings report, Tim Cook, the company’s CEO, sat on the phone and discussed some of the finer details. While Cook isn’t going to reveal the whole story to folks on an earnings call, the chief executive did share quite a bit, and discusses a few key points why he sees flagging iPhone upgrades. Apple confirmed in its quarterly report that iPhone sales are down year-over-year, and Cook identified a few different culprits.
First, as mentioned above, it comes down to a major impact in international markets. Specifically, those affected in big ways by currency fluctuations. Cook provided some evidence, pointing out that in Turkey revenue fell by upwards of $700 million due to exchange rates directly impacting the price of the iPhone — raising it quite a bit. As a result of that, Apple will be looking to lower iPhone pricing in those markets to help boost sales.
Another minor reason comes down to subsidies for iPhones, which are becoming far more rare in some regions. Japan was provided as an example, with Cook noting that in that country local regulations are removing subsidies altogether. What used to be a lucrative option to help customers pick up a new phone, without having to fork over so much money up front, is starting to become less-and-less available, while the value of subsidies is disappearing as well.
Finally, Cook calls out the company’s battery replacement program that it had running throughout the 2018 year. Cook says he heard analysts say the company shouldn’t go through with it, but decided it was “the right thing to do” for customers. The $29 battery replacement program did allow a lot of customers to hold onto their aging iPhones for a bit longer, which may mean that this year could see a lot more people upgrading to new devices.
Cook said that iPhone sales are down in China, which has been expected. However, in places like Germany, Italy, the United States, Canada, Mexico, and others, sales are up, especially as it relates to upgrades. In addition to that, its Services division is doing ridiculously well.