It’s been billions in net profits with Apple’s quarterly earnings so far. However, when Apple released it quarterly financial results for its fiscal 2016 first quarter, which ended in December 2015, many got thinking about its future outlook.
Apple did not seem worried when it reported a record first quarter results. But deep down we are pretty sure that slowdown of the growth of its hero product – the iPhone – is something worth worrying about. And Apple CEO Tim Cook did indicate the same when he commented, “We do think that iPhone units will decline in the quarter.”
Still then, these are just the very beginnings of Apple’s problems. Simply put, Apple’s quarterly earnings report looks spectacular, but things aren’t looking good for the long run as Quartz pointed out in its report, which suggests that Apple’s profits year-on-year are showing a decline.
Moreover, analysts have also predicted that the iPhone shipment estimates will not do too good, one that is slowly losing interest among consumers. Unfortunately, for Apple the iPhone is the star product that lifts its numbers.
Thanks to its services, Apple can take a deep breath for now, which is the enabling factor for a good-looking quarterly report. But things may not look as good in the forthcoming quarter.
How would Apple sustain this growth in the next quarter and the long run? Is the iPhone 5se Apple’s fallback plan?
Well, in short, the 4-inch iPhone (this time with updated hardware) could be the answer to Apple’s problems, but not a long term solution. While the sales are expected to grow as Apple nears the launch of its next iPhone, Apple needs another iPhone (product) and this is a strategy that has been followed by many, but has never successfully worked for anyone. Shocking however, is the fact that Apple even stooped to the idea of delivering a another affordable iPhone (after the iPhone 5c), which is something that other players like Samsung, Sony and HTC are trying to shake off, by delivering fewer phones in a year.
Apple going the other way with the iPhone 5se is expected to shake things up indeed, but it will only be so for a short while. That short while with Apple’s accumulated monies will be last pretty long, but it has become evidently clear that Apple needs another hero product to up its sales and sustain itself in the coming years.
Initially it was just the iPod, sometime back it was the iPhone, and the manner in which Tim Cook is pushing out varied products (giant iPhones and iPad) that would have given Steve Jobs the jitters, shows that Apple is desperate and is now beginning to experiment once again.
So what are we looking at in the near future? Well, Google and Apple are equally interested in the automated self-driving car, and have been hiring the creme of the crop, (even though Steve Zadesky is expected to quit) lately in the same field. And Apple as always is busy acquiring other companies like Perceptio (AI) and Faceshift (motion capture) the fruits of which may find their way into iPhones or even cars for that matter.
The experimenting will go on, and Tim Cook recently even expressed his interest in VR as The Verge reported. “In terms of VR, I don’t think it’s a niche. It’s really cool and has some interesting applications.” said the CEO. So yes Apple is looking for its next hero product and now is a really good time to start doing it. But for now Tim Cook claims that his focus is still on the iPhone “There are still a lot of people in the world who will buy smartphones and we ought to be able to win over our fair share of those.” Enough said.