As iPhone sales slow, what's in the future for Apple?
Apple announced its best quarter yet on Tuesday, but will the company be forced to strategize as iPhone sales flatline?
The company announced $18.4 billion in profit, and $74.8 million in iPhone sales for Apple鈥檚 first quarter of fiscal year 2016, which ended on December 26.
鈥淥ur team delivered Apple鈥檚 biggest quarter ever, thanks to the world鈥檚 most innovative products and all-time record sales of iPhone, Apple Watch and Apple TV,鈥� said Apple CEO Tim Cook in a .
Apple CFO Luca Maestri also touted Apple鈥檚 successes last quarter, despite what he termed, 鈥渁 very difficult macroeconomic environment.鈥�
In spite of company enthusiasm about Apple鈥檚 overall success at the end of last year, many of Apple鈥檚 biggest revenue spinners, such as the iPhone, experienced . That bodes ill for the company鈥檚 2016 second quarter growth.
Mr. Cook himself predicted that next quarter would see Apple鈥檚 first decline in revenue since 2003, although he was careful to specify that the dip would likely be slight.
Factors that impact Apple鈥檚 bottom line include currency exchange rate shifts and such as China, Russia, Japan, and Canada.
Sales in China, one of Apple鈥檚 biggest markets, last quarter, though revenue growth for the region has remained largely the same, prompting Apple to look for other areas of expansion for their products.
Apple is still confident in its investment in the Chinese market, but in order to counter overseas as well as at home, the company is expanding into new markets.
鈥淲hile iPhones are reaching the end of their market share in the United States, Europe, or China, they are just at the in countries like India, Indonesia, and other emerging markets,鈥� Anshel Gupta, a research director at market research firm Gartner, told .
In many ways, the outlook is promising. iPhone sales in India grew 76 percent over the last year, with 800,000 phones sold in the fourth quarter alone.
Earlier this month, Apple filed a proposal to build brick and mortar stores in India for the first time. Recent changes in India鈥檚 mean that India is more open than ever to Apple鈥檚 strategists.
Currently, however, the tech giant holds less than 2 percent of the smartphone market in the world's largest democracy.
Although other smartphone manufacturers such as Samsung and Micromax currently hold a far , Apple is optimistic about its future in the country. Unlike , the Indian market is not already saturated with Apple products.
Cook further justified Apple 鈥渋ncreasingly putting more energy into the country,鈥� as India鈥檚 young population enters the workforce in droves, generating disposable income that may be spent on status symbol consumer items such as the iPhone. Apple sales in the country are expected to rise 17 percent by next year.
Despite Cook鈥檚 optimism, critics of Apple鈥檚 expansion into the Indian market cite a smaller middle class and a more frugal culture that could hamper smartphone sales.
Jackdaw Research analyst Jan Dawson told the International Business Times, "In China, there is a big conspicuous consumption aspect to the culture where the people want to have the expensive stuff and show it off. In India, that exists in some segments but there is more of a so people want to be seen to have made a smart purchase rather than an expensive purchase."
Indeed, one of the biggest challenges Apple may face in its expansion into the Indian market is its pricing. According to Reuters, approximately 70 percent of smartphone sales in India are made for less than $150. Apple鈥檚 newest models cost far more.
Still, Indian . Apple is exploring ways to make that happen.
