Sales of iPhones seem to be weaker than in previous years, and the Chairman of the Federal Reserve has an explanation: a drop in consumer spending in China.
The implication is that the slowdown in iPhone sales isn’t a result of anything Apple has done.
“The Chinese economy is slowing down. It’s showing up a lot in consumer spending,” Chairman Jerome Powell said at The Economic Club of Washington, DC. “Weak retail spending; everyone has seen the Apple news.”
As head of the Federal Reserve, part of Powell’s job is to watch the global economy. If anyone knows the status of Chinese retail sales, it’s him.
As added evidence there’s word that Samsung is also seeing a slowdown in handset sales in China.
The iPhone’s problem IS China
Last week, Apple CEO Tim Cook warned investors that weak iPhone sales reduced revenue during the last quarter of 2018. Cook specifically singled out one country as a reason for the drop. “Most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline occurred in Greater China.”
What Cook’s statement means is the iPhone is selling fine in every part of world except China.
Since word of the slowdown iPhone sales began to surface, a great many people have expressed opinions on what’s wrong with the 2018 iPhone models: too expensive, too big, too something. What Cook and Chairman Powell are saying is that the only problem that these devices have are related to the Chinese economy, not Apple’s product design.
Still, the company is reportedly doing something to spur sales in China: it’s lowering the cost of the 2017 and 2018 iPhone models in that country.