Technology

Apple will need to up its innovation game for iPhone 8

Cantillon: iPhone sales slump as buyers await 10th anniversary model

Buyers are holding off until launch of iPhone 8 in September. Photograph: Getty

Thu May 4 2017 - 05:15

Given the phenomenal success Apple has achieved in recent years it tends to come as something of a surprise when the company issues results that are less than spectacular.

So it was the case this week when the tech giant posted earnings that were disappointing by Wall Street standards. Revenue of $52.9 billion would hardly be sniffed at by most companies, but given they were down on a Thomson Reuters estimate of $53.02 billion, it set tongues a-wagging and led to a drop in the company’s share value. Ironically, the latest results came out on the same day as Apple briefly hit a new market cap of more than $776.59 billion surpassing its previous peak market value of $774.91 billion.

Shares in the company tumbled 1.9 per cent in after-hours trading late on Tuesday after it reported a 1 per cent surprise fall in iPhones sales for its second quarter with Apple selling 50.76 million smartphones versus 51.19 million a year earlier.

The reason for the drop in sales is presumed to be because many customers are holding off buying a new smartphone in anticipation of the 10th-anniversary edition one, which is due in September.

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Analysts are expecting Apple to pull out all the stops for the forthcoming phone, not just because of the anniversary but also because many of its rivals, most notably Samsung, have upped their game with recent smartphone launches.

If Apple fail to deliver the goods come September, the decline in sales is likely to become more than just a blip. Consumers have come to love the company for the giant leaps it has made in innovation in the past, but in truth there has been little of note of late. The last few iPhone upgrades have provided incremental benefits, such as better screen displays, but little to really wow anyone. The Apple Watch was put forward as a game-changer but has failed to win over either critics or consumers. Indeed, just this week it was revealed that the likes of Amazon, eBay and Google, have all quietly stopped supporting the wearable product.

Meanwhile, there has been much talk of Apple moving into the world of self-driving cars, to which it is unfashionably late given the clamour of companies looking to win big in this space. And we are still waiting for Apple to show its hand in the Artificial Intelligence (AI) or Virtual Reality (VR) space, seen by many as the cutting edge of future tech development.

Apple used to be a leader in pretty much every field it operated in, but whether it can be one again remains to be seen. One thing’s for sure though, it will need more than a better camera on the iPhone 8 to keep it in pole position.

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