Apple CEO Tim Cook has said the company will reconsider the pricing of iPhone models in international markets, after it revealed a decline in revenue from handsets in its quarterly report.
In response to a 15% year-on-year shortfall in iPhone revenue, amid lower demand for the iPhone XR, XS and XS Max devices, Cook said countries where the currency has weakened could be in line for an iPhone price cut.
Cook didn’t mention specific territories, and was likely referring to China, where sales are particularly suffering. However, the British pound has experienced a tremendous fall against the US dollar since the EU referendum, so it’s possible Brits could be in line for cheaper iPhones too.
“When you look at foreign currencies, and then particularly those markets that weakened over the last year, those (iPhone price) increases were obviously more,” Cook told Reuters.
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“And so as we’ve gotten into January and assessed the macroeconomic condition in some of those markets and decided to commensurate with what our local prices were a year ago in the hope of helping the sales in those areas.”
The vow comes with Apple’s year-on-year earnings and profits down for the first time in more than a decade. Despite announcing its second-highest quarter ever in terms of revenue and profit, the tallies fell below the same period last year.
During the past three months of 2018, Apple brought in $84.31 billion, which is a net profit of $19.96 billion. That’s down from the $88.3 billion and profit of $20.1 billion.
The fall in earnings, which had been predicted by Wall Street and prefaced by Apple, is largely down to a 15% year-on-year decline in the money Apple brings in from iPhone sales.
The company is attributing that to a drop in demand in China, while hinting that the offer of cheap battery replacements has affected upgrades. However, it says that there are now a record 1.4 billion active devices, which is up 100 million on last year.
There was good news elsewhere for Apple, with its burgeoning Services devision reaching a record $10.8 billion in October, November and December 2018.
“While it was disappointing to miss our revenue guidance, we manage Apple for the long-term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” said Cook.
“Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem.”
Overall, Wall Street seems to be satisfied by the earnings, with shares rising 2.5% in after-hour trading. That’s despite the company dealing with a mini-crisis thanks to a FaceTime bug that made it possible to see and even hear recipients when they haven’t answered the call.
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