Apple's weakness – Apple's weakness

Published on: January 31, 2019 / Update from: January 31, 2019 - Author: Konrad Wolfenstein

 

China wasn't the only weak spot in Apple's holiday season - China Wasn't the Only Weak Spot in Apple's Holiday Quarter

When Apple lowered its holiday quarter revenue forecast earlier this month, the company's CEO attributed "the majority of our revenue decline and over 100 percent of our global revenue decline year-over-year" to weak sales across China. And while yesterday's results proved it to be mathematically correct - without the negative impact from China, Apple's sales would have seen the least growth - the world's second-largest economy wasn't the company's only weak point, geographically speaking.

As the chart below shows, Apple also suffered declines in sales in Europe and Japan last quarter, largely due to weak demand for new iPhones. A combination of high prices, lower carrier subsidies and longer replacement cycles has led to a 15 percent decline in global iPhone sales, offsetting 19 percent growth over Apple's other products and services.

When Apple revised its revenue guidance for the holiday quarter downwards earlier this month, the company's CEO attributed “most of our revenue shortfall and over 100 percent of our year-over-year worldwide revenue decline” to lackluster sales across Greater China. And while yesterday's results proved that to be mathematically true – without the negative impact from China, Apple's revenue would have seen the slightest growth – the world's second largest economy was not the company's only weak spot, geographically speaking.

As the following chart shows, Apple also suffered sales declines in Europe and Japan in the past quarter, a fact that can mostly be traced back to weak demand for new iPhones. A combination of high prices, lower carrier subsidies and longer replacement cycles has led to a 15 percent drop in global iPhone sales, offsetting 19 percent growth from Apple's other products and services.

You will find more infographics at Statista

 

iPhone weakness overshadows Apple's balance sheet

Apple's balance sheet looks good in almost all areas. Sales in the product groups iPad (+16.9 percent), services (+19.1 percent) and wearables, home and accessories (+33.3 percent) grew in double digits. The iPhone business, however, is weakening. Compared to the previous year, sales of Apple's most important product fell by around 15 percent. The Chinese in particular are currently not really enthusiastic about the iPhone, as a look at the regional distribution of sales shows. Nevertheless, the company continues to be in the black: profits for the period from October to December amount to around 20 billion US dollars, which is at the same level as the previous year.

Apple's balance sheet looks good in almost all areas. Sales of the product groups iPad (+16.9 percent), Services (+19.1 percent) and Wearables, Home and Accessories (+33.3 percent) grew at double-digit rates. However, the iPhone business is weak. Compared to the previous year, sales of Apple's most important product declined by around 15 percent. The Chinese in particular are not really enthusiastic about the iPhone at the moment, as a glance at the regional distribution of sales shows. Nevertheless, the company continues to write deep black figures: the profit for the period from October to December amounts to around 20 billion US dollars and is thus at the level of the previous year.

You can find more infographics at Statista