Apple has been fighting gravity for years, and it’s starting to lose the battle.
The iPhone is by far Apple’s most important product, accounting for nearly two-thirds of the company’s sales last year. But iPhone sales have flatlined since 2015, frustrating the millions of investors in one of the market’s most widely held stocks.
Apple CEO Tim Cook has a plan: Bump up the iPhone’s price and sell customers services and other devices, like Apple Music and the Apple Watch, to go with them. Cook’s strategy has paid off. Apple set sales and profit records a year ago, and it eclipsed a $1 trillion market valuation in August.
Apple (AAPL) warned that it would miss its sales target for the previous quarter, mainly because of weak iPhone demand in China.
It’s not time to panic: Apple remains a healthy company and could survive on inertia alone for years. Despite its revised outlook, Apple still expects to report $84 billion in quarterly sales. That’s a ton of money: That single quarter would be enough to rank No. 33 in last year’s Fortune 500.