Apple Inc. (NASDAQ: AAPL) is the world’s largest smartphone maker. It does not have to trade places with Samsung, as it used to, to keep that position constantly. Unfortunately, Apple cemented its place just as the global smartphone business fell apart. The growth of iPhone sales is the most critical part of Apple’s success.
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Research firm IDC reported that smartphone shipments totaled 1.21 billion last year, the lowest since 2013. It blamed “significantly dampened consumer demand, inflation, and economic uncertainties.” The fourth quarter was tougher. Shipments were down 18.3% year over year to 300.3 million. (Click here for the price of a smartphone is falling more than any other household item.)
The same report showed Apple’s global iPhone shipments in the fourth quarter were down 14.9% to 72.3 million.
In its most recently reported quarter, iPhone sales were $42.6 billion of Apple’s $90.1 billion total. Apple and analysts have hoped that its Services business would be a buffer. While this segment is growing slowly, its revenue was only $19.2 billion last quarter.
iPhone sales are Apple’s oxygen. If they falter into this year, the company will be in more trouble than at any time since the Great Recession.
Apple’s share price was almost straight up over the past five years and is still 232% higher. However, over the past three months, it has been off by over 7% while the market is flat. It is worth noting that Apple has outperformed all other mega tech companies in the stock market recently. Poor iPhone sales could change that for the worse.
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