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Apple Faces Slump In The U.S. Smartphone Market, Posing Challenge For IPhone 15 Launch

Experts claim striking enhancements in upcoming iPhone 15 to improve sales in the U.S market

Apple, Inc. (NASDAQ:AAPL) acknowledged on the earnings call that the U.S. smartphone market has been going through a slump for the past couple of quarters. Bloomberg’s Mark Gurman weighed in on what this could mean for the upcoming iPhone 15 launch.

The soft smartphone market dynamics in the U.S. could pose a challenge for the iPhone 15 launch, said Gurman in the latest installment of his weekly Power-On newsletter.

Reiterating his claim in the recent past, the Apple specialist said the iPhone 15 promises to be the biggest update to the device in three users. When Apple releases new features such as bigger screens with the iPhone 6 in 2014, revamped designs with no home button in the iPhone X in 2017, and 5G connections in iPhone 12 in 2020, these new features usually sell themselves, he said.

Logo of Apple Inc. Apple experiences slump in U.S. smartphone sales, posing challenge for upcoming launch of iPhone 15. MOHAMED M/UNSPLASH. 

“The iPhone 15’s ‘bells and whistles’ would be similarly enticing,” Gurman said. The Pro model, according to the columnist, would include “borders around the display that are one-third thinner, a titanium frame that feels lighter and more premium than the current stainless-steel design, big camera improvements, a USB-C charging port, and a much faster processor,” he said.

 Sale prospects hinge not only on these features and Apple has the big ask of coaxing shoppers to spend on the smartphone, Gurman said. CEO Tim Cook blamed the U.S. iPhone softness on a slowdown in spending by U.S. consumers and currency headwinds, he noted.

The company, though, expects iPhone sales in the U.S. to improve in the current period, the columnist said, adding it could be better than the 2.4% drop seen in the June quarter or even see growth.

That said, overall revenue is expected to decline yet again in the September quarter, which if proved accurate, could extend the company’s year-over-year sales decline for a fourth straight quarter, he said. This hasn’t happened since 2001 and presents a challenging backdrop for the iPhone 15, he added.

Logo of Apple Inc. Apple experiences slump in U.S. smartphone sales, posing challenge for upcoming launch of iPhone 15. MOHAMED M/UNSPLASH. 

Gurman expects the iPhone 15 to go on sale around Sept. 22 following the launch event to be held either on Sept. 12 or 13. Therefore, Apple will get a week of iPhone sales in the September quarter, he said.

However, the real test for Apple will be the holiday quarter, Gurman said. But one thing working in Apple’s favor would be the favorable comparisons with the same period last year, which saw production disruptions at its assembly partner Hon Hai Precision Manufacturing Company Ltd.’s (OTC:HNHPF) China plant, he said.

“So it shouldn’t be hard for the iPhone 15 to show healthy year-over-year growth,” Gurman said. But if Apple runs into its own production problem, the smartphone slowdown could be even worse than feared, he said.

Apple closed Friday’s session down 4.80% at $181.99, according to Zenger News Pro data.


© 2023 Zenger Zenger News does not provide investment advice. All rights reserved.

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