The Overall Problem At Apple Inc. Is A Declining Iphone

For the fiscal year (FY) 2013 fourth quarter (Q4) Apple posted revenue of 37.5 billion and quarterly profits of 7.52 billion. Figure 1 shows financial data for three consecutive years from 2011-2013. See Appendix Figure 1 for financial details. Net sales for FY 2013 were $170,910 million an increase of $14,402 million from FY 2012 (Apple reports, 2013). Apple sold 33.8 million iPhones, 14.1 million iPads, and 4.9 million Macs during 2013 Q4. Apples App Stores’ sales exceeded $10 billion for FY 2013. App Store customers downloaded almost three billion apps in December 2013 making it the most successful month in App Store history (App store sales, 2013).

Since November 1, 2010, Apple's share price appreciation on a quarterly basis has fallen behind the rate of growth in earnings per share. While generally speaking, a lagging share price performance relative to earnings growth is not usually a welcomed outcome. One would at least want the share price growth to be in accordance with the earnings growth indicating strong market presence. However with the Apple iPhone to be launched soon, it provided the support for the share price as Apple's overall market cap continued to rise at a higher

In the article “Apple Forecasts First Sales Drop Since 2003 on iPhone Slowdown” by Adam Satariano he discusses many factors contributing to Apple’s first sales decline in over 13 years and what steps they plan to take to recover. Apple’s revenue was expected to produce $55.5 billion this quarter but the company believes it will be $50-$53 billion dollars (Satariano, “Apple Forecast”). This decreased is believed to show signs of saturation in the smart phone market. Along with iPhones, Apple also had a pause in its iPad and Mac sales last quarter (Satariano, “Apple Forecast”). Apple is still overwhelmingly profitable but they cannot rely on the adoption of smart phones to carry the iPhone sales anymore.

Apple, one of the leading technological companies in the world has recorded revenues uncharacteristically short of expectations. Wall street analysts predicted iPhone sales during their fourth quarter earnings to be ’20 million sales’, with a short fall of ’17 million sold’. With overall revenues recorded at $28.3 billion, substantially short of expectations (Sky News, 2011).

Apple implemented the marketing concept by focusing on customers’ needs through imagination, design, and innovation creating an emotional brand for its customers. Even though Apple is a technological company it takes a humanistic approach to satisfying the needs of its customers far better than the competition.

By this issue Apple was the one stakeholder that benefited the most, because in the same year they also had a new phone released iPhone 7, which created record sales as many of Samsung loyal customers shifted to apple and purchased iPhone 7. In the same year 2016 IPhone 7 created record sales selling seventy eight million and three hundred thousand devices. Apple also had the market share of seventeen-point eight percent making them the market leader once

Apple had nearly $137 billion of cash at the end of Dec 2012. Over the past few years, the Company had been highly successful with the launch of the iPhone 3G in 2008, and which was followed by the launch of iPad in 2010. The Company enjoyed high profitability, and was able to keep its costs at a minimum. The gross margin on the iPhone was between 49% and 58% from October 2010 to March 2012, and the gross margin on the iPad was between 23% and 32% in the same time period. Apple’s capital structure included no debt; hence, there was no outflow of cash for making interest payments.

Apple has to stay on its game to be successful in its arena. If the company does not stay competitive, consumers will resort to other companies that offer a substitution product at a more cost-effective price.

Apple’s iPhone products have been cutting edge in several areas, but Apple also have their disappointments. Apple is said to be a worldwide driving force in the technological business, but they don’t have possession of the smartphone marketplace like they previously did. Competitors such as Samsung and Lenovo have done a better craft of perfecting and preparing toward the variations and growth in technology.

Apple’s product quality problem started when the company introduced the iphone 4, customers began to complain of reception problems. The problems were caused by antenna

In the last quarter the Revenue (in billion) of three of Apple products (Ipod, Mac and iPhone) is of 28.23 and the cost of Revenue is 16.89. The gross profit is 11.38, which leave us between the selling, administration and expenses, also the department of research and development a total operating expense 19.56. so after taxes the income available Is 6.62 with this information investor can identify how Apple has been growing despite the death of their executive chief.

Compared to iPad, Mac, services, and other products of Apple, iPhone sales are the highest. The statistic shows how iPhone has been dominating Apple's product sales and sales of other products are decreasing. According to research outfit as reported by The Wall Street, the first quarter of 2015 shows that Apple is on top by collecting 92 percent of total profit earned by the world's top eight smartphone makers. During the same period of 2014, Apple's share of the profits was 65 percent and that shows how Apple's revenue comes from iPhone. This has made Apple are in risk because if there is an unexpected failure on iPhone, it will give a significant impact towards the company's revenue even as for now, Apple has prevent such

Then, Apple do a research on what people want on the phone and there come out the result that customers is expecting the phone that have function of PDA and function like portable minicomputer. In the same year, the world was shock with the new smartphone, iPhone introduced by Apple with the very strong point of different with their competitor. Apple places the iPhone as versatile, convenient, value added devices for personal and professional use. With only2 years, Apple has gain 18% of the market share which put them in 3rd place among all the smartphone company, then in 2011, even their market share is decrease to 13.8% which put them in second but there have a grow in sales for 250% from 2008 to 2011. The success of the apple is come with their positioning strategy.

January 10, 2007 saw Apple's visionary Steve Jobs unveil the iPhone, which combines the iPod, a cell phone and an Internet handheld device into one slim, portable gadget" (Lee, E. January 10, 2007. PP. 1). In 2011, "the release of the iPhone 4S helped Apple have an exceptional fourth quarter, with sales of 35.5 million units"

Nonetheless, competition in this medium-/low-end market is actually quite high. Many local or even some international brands are now selling their smart phones for thousands of RMBs. Obviously Xiaomi has won a good debut through this pricing strategy.