Apple shares plunged earlier this year, after the OEM announced that its iPhone sales for the first quarter were below expectations.
In Q1 2016, the company sold 10 million less iPhones than one year before, which caused investors to panic. However, the trend reversed after a while and Apple shares not only recuperated their value, but gained a bit extra after the company reported its rejuvenated June quarter earnings.
It should be mentioned that iPhone sales are still on a downward path, despite the optimistic reporting of the third quarter. In the second quarter of 2016, customers purchased 40.4 million handsets from Apple.
The figure is massive and resonated with the expectations Wall Street had from the company, but it still is lackluster when pitted against the numbers from last year. In the second quarter of 2015, Apple sold 47.5 million iPhone units, riding the wave of success from the iPhone 6 and iPhone 6 Plus.
The result of these numbers was that the fiscal third quarter revenue went from $49.6 billion in Q2 2015 to only $42.4 in this year's quarter.
What is more, others are also affected by Apple's declining smartphone sales. A myriad of third party companies around the globe depend on the iPhone faring well to turn a profit. A majority of them are app developers, some of which dedicate their time and resources exclusively to building iOS apps.
Hardware manufacturers that supply components to the OEM are also closely tied to the iPhone's success, and each deceleration of Apple's smartphone sales impacts them significantly.
A recent example comes from Japan Display, a screen supplier for both the iPad and iPhone. The enterprise filed a request for a governmental bailout to keep it from losing huge amounts of money in the wake of weakening iPhone sales. About 50 percent of Japan Display's income is based on delivering displays to be used in Apple devices.
No later than Thursday, Apple's long lasting partner, Foxconn, said that its net profit dropped by a whopping 31 percent as a direct result of dropoffs in iPhone orders.
Meanwhile, Apple fans are anxiously expecting to see the new iPhone 7 and iPhone 7 Plus on Sept. 7, with an official release of the new smartphones being scheduled for Sept. 16.
If historical trends are any indication, the new models could help slow the decline or even level it. However, some experts in the field are doubtful of the popularity of the upcoming handsets, bracing for an iPhone 7 disappointment. Market analysts note that the OEM made several mistakes when crafting the iPhone 7, but only time will tell if they were right or not.
