Apple admits that the debut of the iPhone 15 will be preceded by a slowdown in smartphones

source: Bloomberg

Before the debut of the iPhone 15, Apple finally acknowledged what has been clear for a long time: the industry is facing a slowdown in smartphones. Also: Another M3 Mac test, Apple tries to narrow its Goldman Sachs differences, and Vision Pro development labs slow down. Last week: The iPhone 15 has slimmer bezels, another step towards Apple's dream phone. 

 Apple launches new products. Less than six weeks before the iPhone 15 announcement, Apple finally acknowledged a harsh reality: the US smartphone market is in decline. After announcing on Thursday that slow iPhone sales were dragging down Apple's stock, the company revealed that “the smartphone market has declined in the United States over the past two quarters. 

It challenges the next iPhone, which promises to be the biggest update of the device in three years. When Apple changes phones — say the iPhone 6 in 2014, the iPhone X in 2017, and the iPhone 12 in 2020 — new features tend to sell. In those earlier examples, the company launched major refresh cycles, offering larger screens, redesigned models (the X model doesn't have a home button), and 5G connectivity. Normally, the bells and whistles of the iPhone 15 would be just as attractive. 

The Pro model has bezels that are a third thinner around the screen, a titanium frame that feels lighter and higher quality than the current stainless steel, big camera improvements, a USB-C charging port and a much faster processor. But the new iPhone's sales prospects aren't just about features. Apple needs to do more to entice shoppers to open their wallets. The central theme of the conference after Thursday's results was the slowdown.

 iPhone sales fell 2.4 percent to $39.7 billion in the latest quarter, slightly below Wall Street estimates. The device has had its share of hiccups in the past — including a botched repair in China in early 2019, a Covid-related delay in 2020 and supply chain issues in 2022 — but the iPhone typically doesn't suffer from declining sales. 

 Beijing Retail China's weak inflation leaves the door open for interest rate hikes. Apple blamed currency headwinds for the painful results, but also acknowledged that American shoppers aren't spending as much on its products as they used to. Sales in Apple's home country paled in comparison to China, which CEO Tim Cook called the highlight of the quarter.

 Apple expects iPhone performance to improve this season. That means it's better than 2.4 degrees clinical - maybe even higher. But the company warned that total revenue is likely to be in the same range as last quarter, when it fell. In fact, Apple is poised to suffer its first consecutive quarterly sales decline since 2001. 

This is a rough background for the iPhone 15, which I'm told will go on sale around September 22nd - either after September 12th or 13th.

 The timing means that Apple will sell the iPhone 15 within about a week of the final quarter of the fiscal year, which runs until September. The real test for Apple is the holiday quarter, which runs from October to December. 

This is always the company's busiest time of year. One thing for Apple: This holiday season should be compared to the same period in 2022. Last year, production of the iPhone 14 Pro and Pro Max at Foxconn Technology Group's factories in China was stopped due to the pandemic. This reduced the performance of the iPhone during the season.

 So it shouldn't be difficult for the iPhone 15 to show healthy year-over-year growth (assuming it doesn't run into its own manufacturing issues). If Apple can't handle this, the slowdown in smartphones could be worse than feared.