Apple’s High-Stakes iPhone Launch Explained in Five Charts
Apple Inc.’s annual iPhone unveiling is always its most momentous time of the year — a chance to impress consumers with the company’s latest model and set up the holiday selling season.
Apple is contending with an industrywide slowdown in smartphone demand and fears of a backlash against US-branded technology in China, its largest international market. And the latest iPhone will switch to the USB-C charging standard, potentially irking consumers who have drawers full of Lightning accessories.
Apple also just renewed a contract to get modem chips from Qualcomm Inc., a sign that an effort to build its own components is taking longer than expected.
But the company has several things going in its favor, including an iPhone with enticing new capabilities. And demand for the product has held up better than that of its Android peers. Apple also has successfully shifted more consumers to higher-end models, helping it charge heftier prices.
1. Apple’s Flagship Product
The iPhone is Apple’s biggest source of revenue, generating about half its sales. Add in the Apple Watch and AirPods, which also will get updated at the event, and you’re close to 60%.
2. A Sales Slump
The entire smartphone industry has been in a funk, and Apple hasn’t been immune. Slow sales of the iPhone dragged down its overall revenue, which is poised to fall this year for the first time since 2019.
Sales should begin to rebound in the fiscal first quarter of 2024, which runs through December.
3. More Upscale iPhones
Apple has increasingly steered customers toward its higher-end phones by packing them with exclusive features and more powerful chips. That trend will continue this year, and Apple’s expected to raise prices in at least some markets.
4. Outperforming Peers
Apple has weathered the smartphone slowdown better than most manufacturers. Though its phone shipments slipped 2% last quarter, according to IDC, that was better better than the 15% decline suffered by Samsung Electronics Co. The performance has helped Apple pick up some market share.
5. China Concerns
A key question is whether Chinese consumers will embrace the iPhone 15 the way they did with past models. The market has been a bright spot for Apple recently, but government bans have stoked fears that sentiment could turn against the company. A new smartphone from Huawei Technologies Co. with a fast processor may also shift demand away from the iPhone.
Apple has seen this scenario before. It suffered a weak stretch in China in fiscal 2019 after a nationalist spirit swept the country. But demand ultimately bounced back. Investors will be watching holiday sales closely to see if Apple can weather the challenge this time around.