iPhone sales are struggling to improve, is transitioning to services the way out?

iPhone sales are struggling to improve, is transitioning to services the way out?

According to CNBC, Goldman Sachs has released a report saying that Apple's transformation into a service-oriented company will boost its stock price. However, the iPhone still accounts for two-thirds of Apple's revenue, and service revenue accounts for less than 5% of Apple's total revenue. Is transformation really Apple's way out?

The iPhone SE, launched last month, failed to impress, with its only selling point being the price - $399, $150 less than the iPhone 5S's launch price that year.

Apple is currently trading like a hardware company at 11 times earnings, but when Apple launches services like Apple Music, it's similar to Google or Facebook . The maturing of Apple's relationship with consumers is reflected in a customer base that consumes content and services entirely through Apple's hardware, similar to telecom service providers like T&T and Comcast, and this similarity is increasingly evident in Apple's latest installment plan model for the iPhone and its expected launch of a live TV service.

For investors concerned about profitability, it may be time to stop obsessing over Apple devices. Credit Suisse analyst Kulbinder Garcha said Apple's services business will double by 2020 and make a huge contribution to the tech giant's profits. He raised Apple's price target to $150, 35% higher than Monday's closing price of $111.12.

So far, Apple has captured almost all important markets; sooner or later, this growth will surely come to an end. Over-reliance on a single product will be a serious problem in the future.

Apple's phone sales fell short of expectations at the end of 2015. The iPhone 6S is losing appeal. And Apple will be hurt by the iPhone 6S until the next model is released, which is expected in September. Even Apple can't achieve sales miracles every quarter. However, selling 78.4 million iPhone 6S units in the last quarter of 2015 is not a good performance.

But not all investors have lost confidence in the future of the iPhone.

Jeremy Gleeson, manager of the AXA Global Technology Fund, said Apple remains his top holding and told CNBC on Monday that lower-cost SE devices could help boost iPhone sales.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

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