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Tim Cook's answer to crashing iPhone sales: More iPhones

Sat on your sofa in India? He knows what you need

Apple’s plan to tackle the great iPhone sales slump is for it to produce, yes, more iPhones.

CEO Tim Cook, in a scripted Q&A with the Washington Post, dismissed the six-month drop-off in sales of iPhones – and slowing smartphone sales in general.

Apple is now expected to release the iPhone 7 in September.

Cook reckons smartphones are equivalent to TVs, in that people will own more than one, with consumers unable to resist buying them thanks to features such as Siri.

In a swipe at Wall Street, which has punished Apple’s stock price on the back of falling iPhone sales, Cook reckoned this is a long haul. He is counting on growth in India, where there’s a potential to replace a market dominated by feature and flip phones.

India is the new China, as growth in the latter has slowed.

Apple’s stock, meanwhile, has seen been at its lowest in two years as Wall Street worries about iPhone sales.

Cook told the Washington Post, here:

Over time, I’m convinced every person in the world will have a smartphone. That may take a while, and they won’t all have iPhones. But it is the greatest market on earth from a consumer electronics point of view.

Features will drive sales – including artificial intelligence, i.e. personal assistants – and device performance stats that Cook reckoned will “skyrocket”.

I realize that the people who are focused on this 90-day clock say, “Oh, my God, the smartphone industry only grew by one per cent or decreased by six per cent.” You know, the global economy’s not that great right now. But if you’re in it for the long haul, this is the best market on earth.

What’s next from Apple, then? After five years under Cook, arguably the biggest new thing we’ve seen from Apple is yet another iPhone. Cook and Co have delivered six new makes of iPhone, with a further four derivations based on the overall brand. Differences revolve around newer hardware, size and new software.

There’s been no product “moment” – no Jobsian move of the Mac from Power to Intel, no introduction of the iPhone or announcement of the iPad.

Asked by the WP whether Cook was saying there’s nothing like a smartphone, he said:

I’m not saying we’re not going to do anything else. I’m saying this is still an unbelievable product category to be in, and not just for this quarter, year or for years. So I would not want anybody to think this, oh, this “better days are behind us” thing.

Apple closed 2015 on a big high: claiming record growth in China for Q4 thanks to new iPhones – sales for which were up 71 per cent, with 40 per cent growth in iPhone sales.

But 71 per cent in Q4 became an 11 per cent fall in sales in China in Apple’s first quarter of 2016.

The iPhone accounts for two-thirds of Apple’s business and sales were down 15 per cent to 40.4 million in the three months reported in July. iPhone revenue fell 23 per cent to $24bn. Apple started 2016 with iPhone sales falling 16 per cent in the first three months of the year to 51.2m units, with revenue down 18 per cent to $32.9bn.

Q1 wasn’t just the first time sales of iPhones fell but the result helped upset Apple’s corporate sums, notching up the first fall in revenue in 13 years. ®

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