Throughout 2016, Apple has witnessed a continuous and steady decline in the sales of their products and shares. This reduction has caused various effects to the company especially regarding sustainability as well as profit margins. In response to these declining sales, the company earlier on had hoped to turn things around by launching a new premium device, the iPhone 7. The firm’s management believed that this new release was going to woo more customers into their stores and restore the sales volumes of their products. However, this did not happen as increased reductions in sales were witnessed. This paper explains the reasons that might have led to this continuous decline in the sales of Apple products after the launch if IPhone 7.
The statistics regarding the sale of iPhone 7 were not released by Apple after the launch of the device together with other products for the first one week.
Despite the firm refusing to offer concrete reasons as to why it did not want to release this figures, McMurrer (2016) argues that it is most likely because of the few sales recorded which might have a negative effect on prospect buyers if released. This argument coincides with Sutherland et.al’s (2016) statistics which show that apple’s total market stock was down by approximately 2.4% just two days after the release of the new iPhone 7 models. On the other hand, the company’s share value dropped from $108.36 to close at $105.52 just a day after the launch. This confirms that the release had little positive effects on phone buyers and did not cause any shift in the market value of the firm. Therefore, the budding question in this scenario is what might be the cause for this decline in sales when all the previous models of Apple phones had enjoyed great sales after their release?
Apple has a poor marketing strategy for their products in some countries, especially in Asia. This is because the new leadership under Tim Cook has never made efforts to develop a tailored marketing strategy for their goods in Asian nations such as China which form’s a large part of the company’s market. As a result, the company offers little regarding customer demands which makes some clients to be unsatisfied. This, McMurrer (2016) believes that it is one of the reasons that made buyers in such places not to consider buying the new premium device as they felt that there are some certain needs which it would not be able to satisfy. Therefore, as advised by Hoog and Strzempka (2016), Apple have to go back and formulate region specific marketing strategies for new products to woo back their old customers as well as attracting new ones.
Competition also plays a big role in the declining sales issue facing Apple. The company is known to produce high-end devices with great features. However, for one to enjoy the prestige that comes with Apple devices, they have to pay a lot. Therefore, new companies are taking advantage if this situation by producing devices with high-end features and offering such devices at reduced prices. As a result, customers are shifting to such companies as they feel that they have a chance to save (Sutherland, et.al, 2016). This is mostly widespread in areas where barriers to entry into the mobile phone market are low. In such places, local providers are able to enter the market and also replicate apple’s devices thereby catching the attention of many would be Apple customers.
Apple’s iPhone 7 might also have failed to restore the firm’s sales to their previous levels because of the perceived limited modifications it has as compared to its predecessor, iPhone 6. This is because almost all features that are present in iPhone 6 are the ones included in iPhone 7 with only slight modifications. According to Sutherland, et.al (2016), this makes some people feel that there is nothing new in buying the phone. To them it is just like a remodeled iPhone 6 and therefore, it should not be costly to purchase. Moreover, some iPhone 6 features that have been done away with iPhone 7 such as the audio jack pin feature seems to have had more popularity with many Apple fans.
Consumer offering software and applications are also affecting the sales margins of Apple iPhone 7. This is because the phone uses the Mac operating system which consists if similar offerings as those in previous models of iPhones (McMurrer, 2016). As a result, the firm’s clients feel that the phone does not offer any increased chances of opening up to new features. Therefore, it becomes difficult for them to make that choice of purchasing the phone. Moreover, as this occurs, other operating systems are continuously developing new customer offering software’s which keep on attracting more buyers of their products.
In conclusion, it is evident that Apple sales have gone down since the start of the year 2016. Moreover, the launch of iPhone 7 did not offer any remedy as the phone itself failed to attract many buyers. This declining is primarily because of competition, lack of customer tailored market strategies, and little modifications of the device in comparison with the previous models. Therefore, the firm has to consider enacting various customer and region specific marketing strategies as well as increasing their consumer offering software so as to maintain their gigantic status in the mobile phone industry.
- Hoog, A., & Strzempka, K. (2016). iPhone and iOS forensics: Investigation, analysis and mobile security for Apple iPhone, iPad and iOS devices. Elsevier.
- McMurrer, M. (2016). Exclusive gadget: Apple & AT&T antitrust litigation and the iPhone aftermarkets. Journal of Corporation Law, 36(2), 495-512. Retrieved from http://search.proquest.com/docview/851270423?accountid=45049
- Sutherland, T. J., Arnholt, C. A., Fordham, P. L., & Tanner, J. L. (2016). U.S. Patent No. D640,219. Washington, DC: U.S. Patent and Trademark Office.