Commentary

Forecast: IPhone Sales Set To Decline

Judging by the additional dollars that Apple is pouring into TV ads, the tech titan is having a harder time getting U.S. consumers excited about its latest iPhones.

That’s according to fresh analysis from ad intelligence firm MediaRadar, which shows that Apple increased its TV ad budget by more than 500% to promote the iPhone X, XS, XS Max, and XR, compared to the money it spent pushing the iPhone 8 and 8 Plus.

Even though the iPhone X was discontinued in September, the X series was boosted by 12 TV ads for every 3 ads that supported 8 and 8 Plus.

For the iPhone 8 and 8 Plus, Apple produced three unique TV spots, while, for the X, XS, XS Max, and XR, it has produced 12 so far, with more expected, as the XR was just recently released.

Meanwhile, with Apple’s self-produced iPhone TV commercials, co-branded by one of four national wireless carriers, MediaRadar found that AT&T spent over $85 million -- making it the largest promoter of the iPhone X, XS, XS Max, and XR.

advertisement

advertisement

AT&T did not run any iPhone 8 or 8 Plus ads produced by Apple in the last year, but it did run its own, AT&T-produced ads that made mention of the 8 and 8 Plus.

The insight into Apple’s ad strategy follows a number of ominous signs regarding the company’s future iPhone sales.

In a recent note to investors, Guggenheim analyst Robert Cihra recently projected that iPhone sales were set to decline by 5% from Apple’s fiscal year 2018 to fiscal year 2019.

“We see growing risk of even softer iPhone unit demand, with downside in China, India and other emerging markets, where Apple may need to start considering lower price points,” Cihra warned.

Among other issues, Cihra said Apple was having a harder time selling its priciest iPhones, while its historically average selling price will no longer be enough to offset sagging sales.

Both Goldman and UBS also recently suggested that Apple would likely sell fewer iPhones than previously expected.

Still, Todd Krizelman, CEO and co-founder of MediaRadar, suggested other possible reasons for Apple’s recent ad sales boost.

Regarding Apple’s latest iPhone lines, Krizelman notes in the new report: “The difference in TV investment might be caused by the differentiation in this line.”

Added Krizelman: “Apple has had to promote four different devices, overall.”
Next story loading loading..