Tech giant Apple recently announced that it is lowering down its sales expectations for the second fiscal quarter of the year. Apple added that the company continues to face a decline in terms of sales of its flagship product, the Apple iPhone, especially in the world's largest smartphone market, China.
Despite these rather bleak forecasts, Apple Chief Executive Officer Tim Cook said that he is still positive that trade tensions between two of the world's largest economies will ease within the foreseeable future. Mr. Cook is in regular contact with U.S. President Donald Trump who himself have toned down its trade rhetoric regarding China.
Mr. Cook also said that Apple is formulating new strategies in order to cope up with the decline in demands. Among the discussed strategy is to price its flagship products in local Chinese currency, the same thing is expected to be adopted in another international market. By adopting this new pricing strategy, Apple hopes that it will reinvigorate demand and ultimately boost sales in international markets.
Despite the slump in iPhone sales, especially in China, the tech giant said that its services such as the App Store and Apple Music are experiencing quite a boost in sales. Apple combined services reached $10.8 billion in revenue, a significant gross margin of 64 percent. Because of this positive growth, many Apple investors are counting on these services as one the top money-maker for the American tech giant.
Apple claims that it now has 360 million subscribers to both its own services as well as its third-party partners. While many market analysts have seen this as a quite ambitious target, Apple said that it is expecting to expand its user base to as much as 500 million by the end of the decade. Apple is betting big on its massive user base which now counts around 1.4 billion active devices. This figure alone represents an increase of 100 million compared to its figure last year. Of this figure, iPhones count 900 million of those.
In a statement with Reuters, Apple CEO Tim Cook said, "When you look at foreign currencies and then particularly those markets that weakened over the last year those iPhone price increases were obviously more."
Mr. Cook said that he is optimistic that both China and the United States will ultimately come up with a solution to the trade war. A decision that will prove beneficial not only to the two countries but also to Apple's overall business.
