A leaked image of the iPhone 8 sent the internet into a frenzy. Picture: Supplied
A leaked image of the iPhone 8 sent the internet into a frenzy. Picture: Supplied

Apple iPhone 8 may not come out this year

APPLE CEO Tim Cook has admitted he's got a problem: the hype about the future of the iPhone is hurting iPhone sales right now.

Apple today released the results for the quarter ending April 1, with sales of iPhone taking a surprising downturn despite optimistic Wall St expectations.

Apple sold 50.76 million iPhones in the quarter, down from 51.19 million in the previous year and short of the 51.5 million expected.

While that is not much of a drop, it was enough for the Apple share price to fall 1 per cent in after-hours trading.

"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," Cook said.

With the tenth anniversary of the iPhone, Apple is expected to radically update its smartphone later this year and there has been a steady diet of leaks with conflicting reports about how Apple will change the form and function of the iPhone, including 3D facial recognication and a curved display.

While the Apple boss believes the fevered hype around Apple's forthcoming device is having a chilling effect on sales, reports suggest the iPhone 8 is facing delay issues that could dramatically push back its release.

This past week, analysts from Deutsche Bank produced a report in which they speculated that due to issues with suppliers, the iPhone 8 won't be ready for release before the end of the calendar year.

They believe we could be stuck waiting for the OLED-screened phone until 2018.

Today's sales figures shows just how reliant Apple is on the iPhone.

Analyst Jan Dawson said in the past five years, the iPhone has gone from being half of Apple's revenue to two thirds, while iPad and Macs have dropped from 36 per cent to 19 per cent.

Apple still is yet to give details on the sales of Apple Watch, although Apple CEO Tim Cook said the sales of Apple Watch have doubled in the past year.

Cook said if you were to take the revenue from Apple Watch, Beats headphones and AirPods then it would equate to the size of a Fortune 500 company.

Likewise, Cook equated Apple Services - which includes Apple Music and iCloud subscriptions - as being the size of a Fortune 100 company with more than $9.3 billion in revenue.

The plight of the iPad continues to be grim, with sales falling for another quarter down to 8.9 million units, which is a drop in a year in unit sales of 13 per cent and 12 per cent in revenue.

To find a quarter where the iPad has achieved such a low result, you have to go back to the first year of iPad sales back in 2011.

Several times in the briefing after the results were posted, Cook talked of the challenge in finding the right balance in meeting demand.

He said Apple was still not able to meet demand for the wireless AirPods, which this week scored the highest ever customer satisfaction rating for an Apple product, and he said Apple had got it wrong in underestimating demand for the iPhone 7 Plus, the first iPhone with a dual lens camera.

Having two products be more popular than expected is not the only issue Cook faces. There is also the issue of what to do with Apple's enormous cash reserve which now is $340 billion.

Other key points from today's results are:

• App store revenue grew 40 per cent in the past year.

• Apple Mac sales, despite the relaunched MacBook Pro, only grew by 4 per cent.

• Apple plans to double the size of its service business by 2020.

News Corp Australia


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