Apple products are normally all blockbuster hits with consumers, selling out quickly, which is something that could protect the company from feeling the effects of a recession but depending on how the iPhone 14 sells that logic might not hold up.
Tech Giant Apple has some of the world’s most sought-after technology products, including iPhones, iPads, and Mac computers. Each product is a best seller or sell-out with every new release or upgrade. But is this the same for the latest Apple iPhone upgrade, the iPhone 14 lineup?
Due to the economic climate we live in after the pandemic, consumers are becoming much savvier about how they spend their money. With house prices and utilities soaring along with increased food prices, the amount of expendable money consumers once had is dwindling.
When Apple released the launch date of the iPhone 14 lineup, people wondered if the timing was correct for Apple to release their most expensive phone yet and if Apple’s luxury technology would win in a battle against the cost of living crisis and a volatile economy.
The iPhone 14 may have lost. This week Apple will report the September earnings for the company, which will include the all-important first two weeks of sales from the iPhone 14. It is rumored that the phone did not perform as well as Apple expected as the company stopped planning to increase its newest phone’s production.
Apple shares briefly dipped last month, showing that not even mega-companies like Apple can weather the economic storm without some bumps in the road. It is forecasted that Apple has had a 29% drop in profits from last year, with a reported revenue of $88.9 billion.
While Apple upgrades in the last number of years have been lackluster when it comes to new features and designs, they have many dedicated users that will upgrade regardless, and they rely on that. But in today’s market, will people part with so much money for very little extra?
The technology and electronics industry is heading for a period of slow growth as the economy tries to recover itself. While personal technology brings a level of ease to our lives, it is not an essential part that needs to be upgraded yearly. Apple only forecasts its sales by product segments, making it harder to determine what is selling and what is not.
Another area for people to watch is Apple’s service area, which includes its paid subscriptions. This is an increasingly important area of the business, and it offsets the slower hardware segment of the Apple portfolio. It reportedly took a 3% hit from last year due to a change in consumer habits, which solidifies the theory that consumers are being more careful with their money.
Tech Giants like Apple could be in for a slowdown in turnover over the next number of years as the economy, hyperinflation, and the cost of living crisis looks like it is not going away soon. Some might wonder if Apple brought out the iPhone 14 as a more budget-like model to reflect the times we live in, would it have performed better? Consumers are faced with so much hardship coming into the holiday season buying luxury brands like Apple will not be high on people’s lists.