Apple aims to reboot sales with iPhone 7 launch
Published 05/09/2016 | 07:33
Apple will attempt to reboot sales of the iPhone this week after an unprecedented recent decline that has left the tech giant grappling with falling revenue for the first time in over a decade.
The company is seeking to entice consumers with a new version of the popular device that features a high-powered camera as its key selling point amid fears that the smartphone market has reached saturation.
The iPhone 7 is unlikely to come with the radical design changes that have defined the handset since Steve Jobs shook up the telecoms world with the first model almost a decade ago.
Instead, Apple will make several tweaks to the phone that it hopes will maintain the company’s reputation for invention when it is unveiled in San Francisco on Wednesday, less than one week after a long-running tax row with Brussels erupted into a public war of words after the European Commission ordered Ireland to recoup €13bn (£11bn) in taxes from the company.
Apple, which last month marked five years since chief executive Tim Cook replaced Mr Jobs, is struggling to stem the rare slide in revenue, with the sale of new products such as last year’s Apple Watch. Its share price has fallen by a fifth since its peak in 2015.
The iPhone 7 is expected to include a new “dual-lens” camera system capable of taking photographs that can rival those of high-end cameras, and the removal of the traditional headphone port in favour of wireless headphones.
The company is aiming to encourage regular upgrades of its phones as well as focus on making more from the more than one billion devices running its software by selling services such as music subscriptions and online storage as well as peripherals such as the Apple Watch and headphones.
“I think you’ll see more focus on the software and services; they need to take their loyal user base and drive revenue in different places,” said Ben Wood, an analyst at CCS Insight.
Mr Wood said that Wednesday’s event could include a heavy focus on music, with the removal of the headphone jack – a staple of the iPhone since it was first launched – being used as an opportunity to sell higher-margin headphones and a more expensive high-quality version of its Apple Music streaming service.
Apple’s $3bn (£2.3bn) purchase of Beats, the headphones and music streaming company founded by rapper Dr Dre, in 2014 has so far been used mainly as a springboard for Apple Music, with Apple’s glitzy launch events featuring little mention of the high-end headphones division, but analysts believe there could be potential for greater cross-selling. “You can almost guarantee they’ll introduce a portfolio of headphones for the new [iPhone] experience,” Mr Wood said.
This week, Mr Cook is also expected to unveil a new version of the Apple Watch with a faster processor and location technology.
Although the device has outsold its competition since it was released last year, sales have still been muted in comparison to those of Apple’s other hit products.
Apple has not revealed how many Apple Watches it has sold to date, but analysts pin the figure at around 15m – roughly the number of iPhones sold in a month.