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Apple's Secret Critical Sign that Things Are Really Bad for the iPhone


CREDIT: Getty Images
Apple may have other products and services, but the company has effectively become the iPhone. It's the most universally used of Apple's wares and the best known. The number of units sold each quarter leave Macs, iPads, Apple Watches, Apple TVs, and who knows what else in the dust. That's true even if you add all the other unit sales together. The company's financial welfare rises and falls with the fate of the mobile handset.
There have been fluctuations that worried markets. There was the time that sales flattened year over year during the last quarter in the year, bringing on predictions of "peak iPhone." Things rebounded, but then, in the second calendar quarter of last year, unit sales were down 20 percent compared to 2015.
However, things may have become worse. A little "tell," the unconscious signals people give off indicating problems, suggests that Apple has been worried and continues so. It's not what Apple is doing so much as what it isn'tdoing. Apple has turned down the bragging.
Not so long ago, Apple loved to trumpet how many new model iPhones it sold on the weekend of their first availability. The company was happy to point out the "new record" first weekend sales of the iPhone 5s and 5c in 2013. For the iPhone 6, again it was a new record and CEO Tim Cook said they "couldn't be happier." For the iPhone 5, it was "sales top 5 million" and another 2 million in China as a separate announcement. Searching on Apple's site, there were similar notes for the 4S and 3G.
However, there was no similar press release for iPhone 7 sales nor for the 8.
When Apple stopped reporting opening weekend sales for the 7, the Wall Street Journal noted that it had reported that figure for the previous 8 years. Apple claimed that the numbers weren't as important as they had been because they were more a measure of product supply than customer demand. Of course the phone would sell out to the numbers Apple had built.
"As we have expanded our distribution through carriers and resellers to hundreds of thousands of locations around the world, we are now at a point where we know before taking the first customer pre-order that we will sell out of iPhone 7," an Apple spokesperson told Reuters.
Maybe there was concern about always being tied to reporting unit figures. Analysts and investors have poured over them to discern how things were going. But to say it was a measure of supply didn't pass the common sense test then and it doesn't now. If you match supply to demand, then one equals the other and the opening weekend numbers domeasure demand.
It's not the first time Apple decided to avoid reporting unit sales that could be considered embarrassing. It tosses the Apple Watch into the "other products" category in its financial reporting.
Data from mobile analytics company Localytics suggested that the iPhone 7 had sold "on track" with previous models. But the 7 was at 1 percent market adoption and the 7 Plus at 0.2 percent, compared to 2 percent and 0.3 percent for the iPhone 6 and 6 Plus.More numbers from Localytics suggest that the iPhone 8 has done far worse. The 8 itself achieved 0.3 percent adoption, although the 8 Plus hit 0.4 percent, which might mean that Apple customers finally decided to join much of the rest of the world and opt for large-screen phones.
Combine that data with reports of short lines at Apple stores and it may be that the iPhone 8 isn't going to go much of anywhere, comparatively speaking.
The big question is how the iPhone X will do. A good many people might opt for it, but at that price, in a global and often price-sensitive market, the outrageous entry-level price could mean that an awful lot of consumers could give up on Apple and find satisfaction with other phones.


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