Apple Inc. is predicting a sales decrease for the first time in more than a decade, adding to evidence that the market for smartphones is becoming saturated and that expansion in China is no longer enough to maintain the business’s unprecedented run of growth.
That follows a vacation quarter where total sales and iPhone shipments fell short of projections, reinforcing concerns that Apple is reaching the limits of iPhone increase and a drive in China will not make up for a slow down in the remainder of the world — a thought that is fueled a stock fall of 20 percent in the previous six months.
Mobilephone competition Samsung Electronics Co. also recently reported poorer-than-anticipated results.
Apple Chief Executive Officer Tim Cook released products and new services like Apple View to help diversify the business and has enlarged in China, but the firm’s reliance on the iPhone leaves it exposed to any deceleration in demand.
“They’ve a few other merchandises, and possess the capacity to establish other goods, but the hole left from an iPhone slow down is too large to fill,” said Abhey Lamba, an analyst at Mizuho Securities USA. “Its future is whatever is going on in the smartphone space.”
Along with the iPhone, Apple’s other product lines will also be delaying. iPad purchases continued to decrease, dropping to 16.1 million tablet computers during the holiday quarter, compared with a projection of 17.3 million. Mac sales dropped to 5.31 million, compared with the 5.8 million estimated. IPhone sales increased to 74.8 million units, compared with the typical 75 million forecast by analysts.
Apple shares traded in Europe fell 3.2 percent to the equivalent of $96.84 at 9:40 a.m. Paris time.