Tim Cook, the CEO of Apple, has already warned investors: revenues for the first quarter will be lower than expected, and sales of new iPhone do not meet expectations. We bring you the explanation of the CEO and Apple alternatives.
Tim Cook, CEO of Apple, did not bring good news yesterday for its investors: they estimate that the income for the first four months will be 84 billion dollars, below the between 89 billion and 93 billion dollars that initially predicted .
In the letter addressed to investors, the CEO captured the reasons that explain Apple’s worst performance in the first four months, alluding to the challenges of emerging markets, specifically China.
The businessman admits not having appreciated the real magnitude of the economic slowdown, especially stressed in China. Thus, he stressed that tensions between the United States and the Asian giant are irreparably affecting the company.
But that’s not all: other disappointing figures were the sales of the iPhone, which also explains some incomes below expectations. The demand for the new iPhone is not enough, being especially weak in China. Cook also admitted that iPhone updates were not as strong as expected.
“Although the macroeconomic challenges in some markets contributed to this trend, we believe that there are other factors that influence the performance of our iPhone, including the adaptation of consumers to a world with fewer operators, the price increases related to the strength of the US dollar and some customers that take advantage of a lower cost to replace batteries for iPhone.”
Explained the CEO of Apple.
With a decline in iPhone sales, Cook is currently facing one of the biggest challenges in his entire professional career as Apple CEO. It puts in doubt the strategy of Apple to depend as much on a device as they do with the iPhone, and they will have to show that it is only a blip, not a trend.
Michael Gartenberg, an analyst and former marketing director at Apple, explained to Bloomberg that the company now has two options: either reduce the price of the iPhone or maintain the current strategy. In his opinion, he will opt for the first option, marketing the iPhone at a more affordable price.
As long as the problem does not spread too far outside of China, Cook should be able to control the situation. Of course, it is a touch of attention for the company on how risky it is to depend on such a measure of its main product. Since Cook relieved Jobs they have not released many new product types, and those that have been released were mostly linked to the iPhone. Given the recent difficulties, it may now be the time for Apple to bet on acquiring a large company and expanding its presence in different industries.