“Apple Inc., which is expected to unveil the latest version of its iPhone this week, is fighting against two forces to reverse sluggish phone sales: Not only is it becoming more difficult to produce a “wow” factor that excites millions of people to buy a new device, such as larger screens did in 2014, but changes in the way wireless carriers bill customers may cause sticker shock and discourage people from buying up,” Ryan Knutson and Thomas Gryta report for The Wall Street Journal.
“Traditionally, Apple has released major hardware overhauls every other year for the iPhone, which brought in $155 billion of revenue last fiscal year,” Knutson and Gryta report. “But the company is expected to make only small hardware improvements this year, with larger changes coming next year to mark the iPhone’s 10th anniversary.”
“So while consumers typically could pay $200 every two years for a new iPhone, now they must shoulder the full $650 price tag. The amount is usually paid in 24 monthly installments, meaning a phone bill can drop dramatically when the device is paid off. Carriers made the change partly in response to consumer complaints about two-year contracts and partly to get out from under the expensive phone subsidies,” Knutson and Gryta report. “Since the change, which first began in 2013 with T-Mobile US Inc., consumers have been hanging on to their phones longer.”
Read more in the full article here.
MacDailyNews Take: Lots of handwringing.
Again: Calendar fourth quarter will set an all-new quarterly iPhone unit sales record. — MacDailyNews, August 8, 2016
And iPhone sales will return to YOY unit sales growth in Apple’s fiscal 2017.