The end of an era, Apple iPhone sales fall

By: Curtis Wayne 4 Comments   1/28/2016

This looks like the beginning of the end of a technology era.  The sales of the iPhone have been used as the key indicator of the last decade of technology growth.  

This day will gain historical interest in the years to come.  When the sales of the product that led the last decade of technology is now falling, the games is over.  The illusion of growth is going to face reality.

Since the smart phone market in the US is mostly saturated, Apple has been optimistic about growth in China and India.  But with China’s economy in decline, the future is no longer certain.  

This uncertainty will effects all the growth in the tech sector, because most of the growth in technology is related to the growth of the smart phone.  The sales growth of all smart phone vendors and service companies have been riding this wave for many years.  Much of the growth in companies like Google and Facebooks was coming from an increase in Ads on smart phones.  

In a global recession, a smart phone is not very useful.  In the last ten years the smart phone has found little business value.  The primary use of the smart phone is for games, contacts and entertainment.  In a recession, who can afford a toy?  

And the millennial generation is tired of exchanging a home for a smart phone.  A $100 phone bill is about how much principle that is paid each month of a 30 year mortgage.  The choice is either to live in a high rent apartment with a smart phone or buying a house and forgo a smart phone. 

Business value

The future of the smart phone rests on business value.  Business applications that increase production or efficiency will determine the future of the market.  If Apple has the vision to see this trend, they would move more engineers into making business use of their smart phones.  

What this trend means to businesses is that smart phone companies will demand businesses pay more money for the cost of the entire infrastructure, from the data plans to the app engineers to the manufacturing companies like Apple.  As consumer usage drops, they will target the businesses to pay more.  The businesses that use smart phones are currently enjoying low prices because the cost is spread out by the number of people using them as toys.  

The increasing costs will put further pressure on the businesses that use smart phones to evaluate how much value they are really getting from the adding cost they are being asked to pay.  And this in turn with roll back to the manufactures to justify the business value of their products.  

What this trends means to consumers that use smart phones as toys is that they will want lower costs, maybe $5-10 month with only basic features like texting and a camera.  This will remove the need to purchase a new phone every year, which will remove the profit margin of the manufactures to innovation new features for new versions.  In a few more years, the smart phone will get commoditized by the lowest cost producer with the minimum features who will survive by being better at downsizing their business then their competitors.   

In ten years the smart phone will be mostly history.

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Reader Comments

Dale Says: on Thursday, January 28, 2016 9:51:43 PM

The creative financing (leasing the phone instead of purchasing). Which keeps monthly costs down.
And other creative ways to keep the monthly costs low seems to trump these predictions.

The same reasons people continue to buy houses and cars without being able to afford them up front.
Creative affordable financing is what continues to spur them on.

Tim Says: on Thursday, January 28, 2016 10:00:54 PM

The difference is they began with creative financing of smart phones just to get people started.

They cannot use creative financing like they did by stretching mortgages and car loans because people are already maxed out and sick of payments with 3-year contracts.

Jim Says: on Friday, January 29, 2016 8:23:30 AM

The NWO cashless society requires smartphone with Square or something similar to process debit card payments until an electronic Bitcoin like $ replaces debit cards and then the implantable RFID chip comes into play after people beg for it from hackers racking up fraudulent transactions.

Square costs only nine dollars (super cheap compared to a credit card terminal) and many independent businesses are already switching to it as no landline is required either.

The newest iPhone is smaller and cheaper which will improve sales. Contracts are no longer required for financing by any carrier but the three year financing brings the monthly cost down to ~20 bucks for the phone alone which is a lot less than a mortgage.

Dale Says: on Friday, January 29, 2016 8:23:42 AM

Do we really think that a nation whom lives to play (entertain) is going to give up their toys that easy.

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