Apple reaches peak iPhone

Tech giant Apple has predicted falling sales for the first time since 2003. The culprit is the iPhone, which accounts for around two-thirds of revenues. In the three months to 26 December, sales of the must-have gadget grew at the slowest pace since its introduction in 2007 barely 1% up year-on-year. Overall profit rose to $18.3bn on revenue of $76bn. In the current quarter, Apple expects to make sales worth around $50bn-$53bn.

What the commentators said

Still, all this hardly means Apple is about to fall off the tree. Apple has always had the knack of getting people to pay "luxury prices for commodity goods", said Shira Ovide on Bloomberg.net. Apple sells just 14% of the world's smartphones, yet secures more than 90% of the market's profits. The cost of Android-powered handsets has fallen, but iPhone prices have barely changed in years. "The enduring price premium will let Apple continue to gobble outsized revenue and profits."

This suggests that Apple should be able to get maximum mileage out of the iPhone 7 this autumn, especially if, as rumoured, it has some snazzy new features, such as wireless headphones and waterproofing. But longer term, if it is to regain its buzz, said Chris Caso and Liz Pate of SIG Susquehanna, Apple will have to "invent something new" something with the appeal and impact of the iPod, iPhone, or iPad.

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