At Forbes Stephen McBride makes some thought-provoking observations about Apple. The lowest price for the latest iPhone is $1,149—500% of what you would have paid for an iPhone eight years ago. Each year for the last several years Apple has been selling fewer phones. iPhones are two-thirds of Apple’s overall sales. Cutting prices won’t help them.
A publicly traded company that makes most of its money from selling phones is no longer telling investors how many phones it sells!
And its other business lines can’t pick up the slack for falling iPhone sales.
Twenty percent of Apple’s revenue comes from iPads and computers. Those segments are also stagnant.
Which means 86% of Apple’s business is going nowhere.
Could Apple go the other way and slash iPhone prices?
I ran the numbers.
If Apple cut prices back to 2016 levels, it would have to sell 41 million additional phones just to match 2018’s revenue.
The larger point that he raises is that there may be a lifecycle to these disruptive tech companies. Back in 2007 Nokia was cock of the smartphone walk. Its stock has declined 80% since then. Is it Apple’s turn now?