It’s hard to imagine modern-day Apple ever struggling. The company is the most valuable one in the world, and it sits upon a veritable Mount Everest of cash. But one industry analyst thinks that the good times are about to come to an end, with the company will soon enter a “decade-long malaise.” Oh dear.
Models created by Oppenheimer analyst Andrew Uerkwitz suggest that sales of the iPhone (which accounts for an astronomical share of Apple’s profits) are going to peak with next year’s 10th anniversary model.
While it’s expected that Apple will sell 245 million iPhones in the 2018 fiscal year, which runs from October 2017 to September 2018, representing a sales increase of 9%, Uerkwitz believes that this will be “one last growth hurrah.” After that, sales will start to stagnate, or even drop.
According to Uerkwitz, this is because Apple itself has stagnated somewhat. The latest iPhone (and indeed, MacBook Pro) launches were deeply underwhelming affairs. Apple continues to command large sums for devices that, simply put, can’t justify their price tag. Eventually, consumers are going to drift away.
“The risks to the company have never been greater,” said Uerkwitz. “We believe Apple is about to embark on a decade-long malaise.”
Echoing the sentiments expressed by Uerkwitz, another analyst believes that Apple’s woes will be exacerbated by an increasing appetite by the public for used and refurbished smartphones. This market is expected to triple between 2015 and 2020.
Monness Crespi Hardt’s James Cakmak suggested that Apple’s refurbished-phone-program may potentially cannibalize sales of new iPhones, which could further depress average selling prices, resulting in a lower markup for the company.
Make no mistake. In the short-to-medium term, Apple is going to be fine. It’s too big and too rich to fail.
But as we all saw with Blackberry, and indeed with Apple in the 1990’s, it’s incredibly easy to fall into a downward spiral that results in the gradual strangulation of the company. The difference is that this time around, there’s no visionary Steve Jobs to save it.