Can Apple escape phone fatigue?

iPhones -- heck, phones in general -- don't rev you up like they used to, and that's a problem for Apple.
The Cupertino, California-based electronics giant has expanded its horizons over the past few years, entering the wearables market, broadening its phone and tablet lineups, and launching a streaming-music service. But its fortunes are still closely tied to the iPhone, which is responsible for two-thirds of its sales and much of its profit. So what happens when demand starts to slacken?
The outcome of the company's fiscal first quarter, which ended in December, will be released Tuesday. It may mark the start of a slowdown.
Disappointing results would reaffirm the belief that we're suffering from phone fatigue, meaning that new phones no longer excite us and that we're increasingly content with the one we own. Rival Samsung has already warned of continued weakness in its smartphone business, and some worry that Apple may no longer be immune.
We'll see if that's the case come Tuesday. It will be tough for Apple to top last year's results, when the tech giant posted the highest profit of any public company ever, thanks to the larger screens of the iPhone 6 and iPhone 6 Plus.
Can Apple do it again and sell more iPhones than ever before? In October, CEO Tim Cook said the company's iPhone sales would rise in its first quarter. Most analysts polled by Fortune agreed, but they've also grown more cautious over the past few weeks.
The problem is that the latest iPhone models, the 6S and 6S Plus, didn't add enough new features to prompt customers in places like the US to upgrade. In addition, the economy in China, one of Apple's most important markets, has been struggling and may have put a damper on the willingness of consumers there to snap up a new phone.
Analysts now expect iPhone sales to rise only 2.8 percent from the previous year, to 76.5 million units, below the earlier forecast for 78 million units, according to Fortune. Many believe unit sales could actually decline in the current quarter and in the full fiscal year, which would mark the first time iPhone sales have dropped since Apple started selling the device in 2007.
Wall Street analysts polled by Thomson Reuters also expect a modest 3 percent rise in revenue in Apple's first quarter, followed by a 3 percent revenue drop in its second quarter, a rare decline for Apple.
Src : CNET

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