In the face of waning demand for smartphones worldwide, Apple Inc beat market’s expectations and posted record iPhone sales in the March quarter. The Cupertino, California-based company recorded sales of 52.2 million iPhones up from 50.7 million last year. However, the days ahead may be more challenging for the most valuable company in the US for a couple of key reasons. Apple needs to continue to boost subscriptions on its platforms, which reached 270 million users in the March quarter and includes people who subscribe to third-party apps on the iPhone as well as Apple’s own services like iCloud, Reuters reported citing Julie Ask, an analyst with Forrester. She also added that most of the revenues for Apple are being drawn by apps, but the company needs to get to a place where it’s mostly subscriptions and monthly fees and not just one-off downloads.
Trade tensions with China
The other factor that may concern Apple Inc in the long run is related with US-China trade tensions, Reuters reported. Although there hasn’t been tariff on Apple’s devices including iPhone as yet by China, concerns still linger and may prove detrimental for Apple in the longer run. The sales of Apple Inc rose 21 percent from a year earlier in China recording best growth rate for the country in 10 quarters to $13.0 billion, Reuters reported.
“China only wins if the US wins and the US only wins if China wins,” Reuters reported Apple CEO Tim Cook AS saying on the call on a possible trade war. Tim Cook even visited Washington to meet the US President Donald Trump at the White House to discuss matters related to trade war tensions with China.