iPhone sales declined in every part of the World
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As Apple confirmed in its two most recent earnings calls, iPhone sales have been consistently down year-on-year since October. The Cupertino giant blamed this primarily on weak demand in China, but recent SEC filings show this isn’t the full story.
Apple’s recent Form 10-Q filing with the SEC (US Securities and Exchange Commission) contains a detailed breakdown of performance over the past six months by both product category and geographical region.
iPhone sales, as mentioned above, have been down for the past six months. The Greater China region which includes China, Hong Kong, and Taiwan has undoubtedly impacted Apple’s total shipments the most, but in actual fact, the company has been experiencing “lower iPhone unit sales in all the reportable geographical segments” since October. This has resulted in year-on-year revenue declines for all regions except the Americas (North and South America), with Greater China being the most affected followed by Europe and Japan.
In almost every geographical segment, Apple’s lower iPhone shipments were partially offset by improved performance in other product categories. For example, in Europe, the company’s Services and Wearables businesses grew significantly, while over in Japan Services and iPad were key. In the Americas, however, strong Services and Wearables performance managed to entirely offset weak iPhone shipments and push year-on-year growth to a decent 4%.
Taking a look at the company’s performance over the past three months rather than six, it seems as though Apple’s efforts in certain regions are finally beginning to pay off. Other markets, however, seem to be in decline.
“In the Americas, however, strong Services and Wearables performance managed to entirely offset weak iPhone shipments and push year-on-year growth to a decent 4%.”
As mentioned by Apple in its recent earnings call, the company noticed improved demand in Greater China towards the end of the quarter. It didn’t elaborate on the matter, but it seems to have translated into slightly better financial results for the brand as, for the three months ending March 31st, the year-on-year sales decline was 22%. This is still pretty major, but it represents an improvement over the -25% average Apple has experienced in the region since October.
Another region that has improved in Japan. Over the past six months, Apple’s sales have dropped an average of 2%, but throughout the first three months of 2019 sales were actually up 1%. Similarly, the Americas continued to experience growth throughout the past quarter.
Moving on to Europe and the Rest of Asia Pacific, these two geographical segments didn’t fare as well. Since October, Apple has experienced an average revenue decline in these regions of 4% and 2% respectively. But during the first quarter of the year, these numbers nosedived to 6% and 9% due primarily to even lower iPhone demand.
Regarding Apple’s performance throughout the rest of 2019, the Cupertino giant now appears confident that it can improve the situation in Greater China and ultimately slow down its year-on-year decline. Nevertheless, it’s still forecasting a drop for this current quarter and, with business in Europe and the Rest of Asia Pacific seemingly struggling, it’ll remain to be seen how Apple handles the situation.
Towards the end of 2019, Apple’s next-gen iPhones should provide a decent boost to demand. However, analyst Ming-Chi Kuo recently predicted almost no growth. Instead, Kuo expects iPhone sales to pick up towards the end of 2020 as a result of the first 5G models which should feature modems from both Samsung and Qualcomm.
Questions & Answers
Q.Which geographical regions have seen a year-on-year revenue decline for Apple?
Which geographical regions have seen a year-on-year revenue decline for Apple?
Revenue has declined in all regions except the Americas. Greater China was most affected, followed by Europe and Japan. This covers the period since October.
Q.How have other product categories performed to offset the decline in iPhone sales?
How have other product categories performed to offset the decline in iPhone sales?
Improved performance in other product categories partially offset lower iPhone shipments. For example, Services and Wearables grew significantly in Europe, and in Japan Services and iPad were key.
Q.Which regions saw their sales decline worsen during the most recent quarter?
Which regions saw their sales decline worsen during the most recent quarter?
Europe and the Rest of Asia Pacific saw their average revenue decline worsen. Their numbers nosedived to 6% and 9% respectively during the first quarter due to lower iPhone demand.
Q.What is the long-term outlook for iPhone sales according to an analyst?
What is the long-term outlook for iPhone sales according to an analyst?
Analyst Ming-Chi Kuo predicts almost no growth for next-gen iPhones towards the end of 2019. He expects sales to pick up towards the end of 2020 with the first 5G models.
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