Apple Inc. (NASDAQ:AAPL) is widely expected to reveal another slowdown in iPhone sales in the third quarter as consumers hold out for the updated model.
The iPhone 8 is said to be set for a September release but some reports have suggested it could be delayed until the end of the year due to supply chain issues.
Chief executive Tim Cook in May blamed delayed purchases in anticipation of the 10th anniversary iPhone on a second quarter decline in sales. Apple shipped 50.8 mln iPhones in the quarter ended 1 April, down from 51.2 mln shipped in the second quarter of 2016.
A similar trend is likely to follow in the group’s third quarter results, published after the US market closes on Tuesday. The quarter to June has been Apple’s weakest period every year since the company seemed to use September as its launch date for new iPhones.
Apple is also facing increasing competition from Samsung, which last week reported record second quarter earnings on the back of a jump on sales of its new Galaxy S8 smartphone.
While Apple sold fewer iPhones in the most recent quarter, Cook has told shareholders to look beyond greater China where the smartphone market is saturated.
“Smart phone users switching to iPhones, and upgrades from existing iPhone users are both at record highs,” said David Madden, market analyst at CMC Market UK. “This tells us that iPhones are still extremely popular in the rest of Apple’s market.”
READ: Apple hit by fresh iPhone 8 delay rumours after analysts point to development issues
Apple diversifies business amid fierce smartphone competition
As competition in the smartphone market mounts, Apple has been beefing up other areas of the business. Apple will begin selling its HomePod smart speaker in December to rival the Amazon Echo and Google Home. Last month the company confirmed it is also developing driverless technology.
Analysts expect Apple will report third quarter revenue to rise 6% to US$44.9bn, compared to the same period a year ago, and net income to increase about 5% to US$8.2bn.
However, the results are likely to be overshadowed by Apple’s outlook for the iPhone 8. Some analysts have suggested the new iPhone could be delayed, due to struggles with getting the cutting edge components it needs.
Royal Bank of Canada analyst Amit Daryanani said the flagship device may not see initial shipments until October. This means volume shipments could be delayed until December, pushing the benefit from sales of the new phones into the next financial year, Daryanani added.
iPhone 8 rumours ...
The new iPhone is expected to include facial recognition, removing the need for a passcode or fingerprint sensor.
It is also said to include an OLED edge-to-edge display, a change from the LCD screen of previous models.
Consumers are expected to be set back by about US$1,000 to get their hands on the 10th anniversary edition, boosting average selling prices for Apple.