Apple blames China, battery replacement offer for weak iPhone demand

In its recent letter, Apple has informed about its slow iPhone sales, blaming it mostly on China and also on battery replacement services, saying it could miss $9 billion due to this.

Apple CEO Tim Cook published a letter to investors yesterday that warned about weaker than expected first-quarter earnings (October to December) stating fewer iPhone upgrades than anticipated. The weakened demand is mostly from China, though ‘in some developed markets, iPhone upgrades also were not as strong’ as they thought it would be.

Cook further explained reasons for lower earnings citing earlier launch timing of iPhone XS and XS Max as compared to the iPhone X. He also blamed the strength of the US dollar, supply constraints due to number of Apple’s new products released in the fall, and overall weakness in some markets.

Apple claims XR has been its best-selling iPhone till yet

However, the main reason remains that people are just not buying the new iPhones as Apple hoped. But, Cook was quick to mention that apart from iPhones, other Apple divisions such as Mac, iPad, etc. saw a rise by almost 19% year over year.

Cook also noted that during the second half of 2018, China’s economy slowed down and ‘trade tensions’ between the US and China increased that created uncertainty in the market which resulted in fewer customers. However, Cook still believed that its business is China ‘has a bright future’.

Cook wrote, “Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline.”

Apple revealed that it is expecting a $9 billion loss in revenue because of the weaker iPhone demand, which is also partly because of more people just replacing their batteries that Apple compensated for degrading batteries by cutting down battery replacing costs. The fee led to people swapping their batteries instead of upgrading to new iPhones, reported The Verge.

For the future, Cook said that are ‘as confident as ever in the fundamental strength of our business’. He said that they are ‘undertaking and accelerating’ other initiatives to improve their results, including trade in a phone, transferring current data to the new iPhone and such.

Cook stated, “We are confident and excited about our pipeline of future products and services. Apple innovates like no other company on earth, and we are not taking our foot off the gas. Expectations are high for Apple because they should be. We are committed to exceeding those expectations every day.”