Wait for big upgrade dents iPhones sales

Apple reported falling iPhone sales, highlighting the need to deliver blockbuster new features in the next edition of the flagship device if the company is to fend off rivals like Samsung Electronics Co.
 
Investor confidence has been mounting ahead of a major iPhone revamp due later this year. Yet competitors released new high-end smartphones recently, putting pressure on Apple to deliver a device that’s advanced enough to entice existing users to upgrade and lure new customers.
 
Apple sold 50.8 million iPhones in the quarter ended April 1, down from 51.2 million units in the same period a year earlier, and less than the 51.4 million predicted in a Bloomberg survey of analysts.  "We’re seeing what we believe to be a pause in purchases of iPhone, which we believe are due to the earlier and much more frequent reports about future iPhones," Apple Chief Executive Officer Tim Cook said during a conference call with analysts. In the past, Apple changed the basic shape of the iPhone about every two years. The iPhone 7, unveiled in September, had similar form and features to its predecessor, extending the cycle to three years. That may have encouraged more customers to delay purchases.

 

Apple stock slipped almost 2 per cent in extended trading. The shares have jumped 27 per cent this year and closed at a record Tuesday on anticipation of an iPhone 8 launch in the fall for the 10th anniversary of the device. The company has tested a new type of screen, curved glass, stainless steel materials, new cameras and augmented-reality features.
 
"We agree with the market that a bet on shares of Apple is a bet on the company’s ability to transition from their existing iPhone platform to an augmented reality-driven platform in the future," said Gene Munster, co-founder of Loup Ventures and a former veteran Apple analyst.

 
Apple had $257 billion in cash and equivalents at the end of the quarter. The company said it will return more of that to shareholders, announcing $50 billion in new buybacks and a 63-cent dividend. Analysts had forecast 62 cents, up from the 57 cents paid in its 2016 fiscal year. The company had already announced $175 billion in repurchases, helping maintain the stock price in lulls between new products.
 
The Cupertino, California-based company also forecast $43.5 billion to $45.5 billion in revenue for the current quarter, below analysts’ estimates of $45.7 billion.