Apple's iPhone sales continue to decline. Apple just reported its latest Q3 earnings, and the company sold 40.4 million iPhones in the recent quarter, compared to 47.5 million this time last year. That's a 15 percent drop, and a sign that iPhone growth momentum has significantly stalled. The slump in sales means Apple's profit has dropped 27 percent as a result. Last quarter, iPhone sales were also down 16 percent year-over-year. Apple introduced the iPhone SE in March, and it has already had an effect on the overall balance of iPhone sales. Apple's average selling price for the iPhone has dropped to $595 from $662 last year, suggesting that people are opting for the smaller iPhone SE.
A slowdown in iPhone sales this year was always likely. Market research firm Gartner predicted that smartphone sales would slow this year worldwide, and the inevitable announcement of a new iPhone in September has only helped sales slow even more. A slowing of smartphone sales is a rocky road that companies like Samsung and Google can maneuver, but Apple relies on the iPhone for around 60 percent of its overall revenue. However, Apple is seeing impressive growth in its services division, by selling software and services to existing iPhone users. Apple continues to make more revenue from its services than selling Macs. The question is whether the iPhone can return to the impressive growth we've seen previously with the new model due later this year.
Will the iPhone 7 be enough to boost sales again?
Most rumors suggest the "iPhone 7" is not going to be a significant upgrade to the existing iPhone 6S model, and Apple might not even opt to call it the iPhone 7 as a result. The next iPhone is expected to include a bigger camera bump, the removal of the headphone jack, and improved antenna lines. The Wall Street Journal previously reported that bigger changes are coming to the iPhone next year.
Apple isn't giving any specific guidance on how iPhone revenue or sales will fare next quarter, but the company expects its overall revenue to be between $45.5 billion and $47.5 billion, down from the same period last year. Apple held an investor call today, but the company didn't provide any additional guidance on the future of iPhone sales.