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Apple expected to see decreasing profits from hardware

  • Author:Nora
  • Release on :2016-01-29

Apple is expected to see difficulties maintaining strong hardware sales, as sales of iPhone, iPad and Mac-series products during its fiscal first quarter of 2016 were all weaker than expected. Since mature markets are unlikely to see significant growth, while the China market is filled with uncertainties, and Apple is lacking competitiveness in emerging markets, Apple is likely to focus more on its services such as Apple Pay, AppleCare and App Store to boost its profitability.

Although Apple achieved record revenues in the quarter and had an on-year growth of 2%, the company's iPhones sales had flat performance compared to a year ago at 74.8 million units in the quarter, and both its iPad and Mac-series sales were down on year, showing that its large-size iPad Pro did not have much of a benefit in boosting performance in the market.

Apple's new 4-inch iPhone, next-generation iPad Air and second-generation Apple Watch are expected to enter mass production in the second quarter, but these products are unlikely to enjoy the strong growths seen in previous years.

Pushing software and services is expected to be a new direction for Apple to boost its profitability. Such a change is expected to impact Taiwan's supply chain and will put pressure on related suppliers to transform their businesses.