Apple in crisis: Why will the iPhone be cheaper?

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Facing disappointing sales, the price of the iPhone could fall in different countries, as indicated by Tim Cook, CEO of Apple

Christmas sales for Apple were not favorable. According to a recently statement, sales decreased 15%, in addition to their shares having a loss of 9.4% in the opening of Wall Street during the last quarter of 2018.

Leer en español: Apple en crisis: ¿Por qué el iPhone será más barato?

Facing with this disappointing new peak in Apple's history, the company announced that it plans to reduce the prices of its flagship product in different countries based on the value of the local currency and not based on changes in the price of the dollar.

An announced fall: is Apple's decline approaching?

Saying that Apple will start to decline is still precipitate, however, the fall in sales is one of the factors that were predicted, based on the economic and production failures that since last year has been suffering.

According to The Wall Street Journal, this decline is mainly due to the erroneous forecasts that have been set for the sale of the smartphone and that have been disappointing for the Apple company.

During November 2018, the sales have led to a 21% loss in the stock market in one month, after revealing its downward trend in sales.

Of the 93,000 million dollars that were planned to raise, only 84,000 million were possible, reported Reuters, issue that had been triggering the interruption of the production and assembly of the iPhone XS, XS Max and XR. All this because of the low demand, according to the Nikkei Agency.

Foxconn, one of its main assemblers, announced in a statement that it intends to save $ 2.5 billion from what was planned for 2019. Quorvo, Lumentum and Japan Display will also reduce their projections for this year, due to the low demand that represents almost the half of its activities; which in turn means cutting staff.

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A difficult economic panorama

"We have decided to return iPhone prices more in line with what our local prices were a year ago, hoping to help with sales in those areas", Tim Cook told Reuters.

Although the countries in which the reduction will be implemented have not been announced, China is one of the sectors in the market that can exemplify the exchange phenomenon that has affected Apple, due to the constant rise of the dollar. In 2018 it reached 10%, which increased the price of the iPhone XS by $ 1,000.

The specialized newspaper, Kippel 01, points out that different specialists consider the economic scenario for Apple difficult. Its unitary shares today are quoted at a lower price: from $ 223 dollars, it has passed to $ 177 dollars.

Similarly, the estimated value of Apple that was presumed at 1 trillion in stock market, has reduced to 817.58 billion dollars, with Microsoft threatening to increase its value, so it is 753.340 million. All this according to data provided by Kippel 01.

Thus, while the investor outlook for Apple is discouraging, Huawei is projected to outperform Apple and Samsung as the largest phone provider in the world.

LatinAmerican Post | Jorge Becerra
Translated from "Apple en crisis: ¿Por qué el iphone será más barato?"