'Half of Apple' is at risk

The iPhone, which generates more than 50% of Apple's revenue, is becoming more difficult to compete in the market, even after a price cut.

In September, Tim Cook took to the stage to talk about the latest iPhone - the iPhone 11. However, the attention of the fans was not the three-lens camera or the new features, but the price. For the first time, Apple launched a new iPhone at a flat price compared to the previous year, even the iPhone 11 model is $ 50 lower than the 2018 iPhone XR.

According to Forbes, Apple's iPhone price cut is showing its "desperation" in selling phones. This could also be a sign of the end of the ambition to dominate the phone market that American businesses aim to.

Apple is a phone company

When it was founded, Apple was on the path to becoming a computer company and indeed it had many years of dominating this market. But since the introduction of the original iPhone (2007), it has sold more than 2.2 billion smartphones with sales of more than $ 1,000 billion, more than any other phone manufacturer in history. As a result, its stock also increased by 2,037%, becoming the largest publicly traded business in the world.

Not only is the best-selling product, the iPhone also brings the highest profit to Apple. According to statistics, the Cupertino-based company has made about US $ 1,990 billion from all products it sells in the period 2007 - 2019, of which, more than half come from iPhones.

Besides, iPhone also brings huge profits. Phonearena estimates that for every USD invested in iPhones, Apple earns 0.6 - 0.7 USD, much higher than the second device, MacBook Air, at only 0.29 USD. In other words, without an iPhone, Apple wouldn't have it today. Instead, it is likely that it will only become a mediocre computer company.

IPhone sales are no longer growing

For many years, iPhone sales grew exponentially and peaked in 2015. But since then, the chart is no longer rising. The company still sells tens of millions of phones every year, but compared to the highest year, the difference is still up to millions, even with 2018 sales of 14 million lower than in 2015.

The first iPhone attracted users thanks to its innovative design and features. That cycle repeats every two years. However, in recent years, the company has not had many noticeable changes and that has reduced the attractiveness of the device.

In fact, the iPhone 11 is completely inferior now when compared to the design, configuration, features, cameras ... with other Android smartphones of the same segment from Samsung, Huawei, Oppo. Yes, the iOS platform is the highlight to "save" the Apple phone, but it also has a lot of bugs and must constantly update the patch.

Apple also seems to know ahead of time the difficulty with the iPhone and find ways to extend the life of the device. From the iPhone X, the company chose a solution to increase product prices to compensate for low sales, keeping revenue from falling. iPhone 4 launched in 2010 costs $ 599, but seven years later, users have to spend $ 849 for iPhone 8 and $ 1,149 for iPhone X, although the upgrades are not necessarily consistent with the phrase "breakthrough".

Part of the price increase, however, is due to Apple spending more money on iPhone production. With the exception of some devices, most iPhone production costs increase year by year. For example, the iPhone 2G costs over $ 200 for all components, but the iPhone XS doubles for $ 400.

iPhone 2019 has a new 'feature': lower prices

Last September, Apple released the iPhone XR - a "downgrade" version of the iPhone X with a similar design, old screen technology, and more affordable prices. The device costs $ 749, which is 35% lower than the iPhone X's $ 1,145. right back.

This year, Apple continued the trend when the iPhone 11 - the successor to the iPhone XR - was only $ 699 - a price not seen on the iPhone since 2017.

"Apple has done that as a last resort to boost the lackluster purchasing needs. But in doing so, Apple is showing that the lucrative iPhone business is over," wrote Stephen McBride of Forbes. specified.

In fact, McBride's comment is not without foundation. Recent financial statements of Apple show that iPhone sales are declining. According to Gartner, the US company sold 40.8 million iPhones in the third quarter of 2019, down 10.7% from the same period last year, equivalent to losing about $ 20 billion.

Recently, Apple also seemed to notice the iPhone business is going down, when it no longer gives sales statistics - a factor it was very proud of before. Besides, "Apple" is geared towards new businesses in software and services as a way to prepare for an iPhone-less future.

Bao Lam (according to Forbes)