But the NYT’s Kevin Roose thinks the company should be more worried about his mom, a longtime Apple fan and tech-savvy retiree who lives in a small town in Ohio.
The problem? She likes her phone — a three-year-old iPhone 6S — as well as her first-generation Apple Watch and (relatively) ancient MacBook Air. She’s not looking to upgrade anytime soon. He writes:
“The most consequential hit to Apple’s bottom line may be from people who are holding on to their phones for longer. Back in 2015, iPhones were being replaced after roughly two years, on average, according to BayStreet Research, a firm that tracks smartphone sales. That period has jumped to roughly three years, and is expected to grow even more.”
Elsewhere in the orchard:
• Apple’s cheapest new model, the iPhone XR, hasn’t done very well, leading the company to cut its production forecast for the device.
• As it shifts from its hardware-first approach into a more services-focused strategy, Apple announced a deal with Samsung, its archrival, to offer iTunes movies and television content on the South Korean company’s television sets. Tomorrow, Samsung is expected to report its first drop in quarterly operating profit in two years, because of slower growth in China.
Hoping for a slump
A growing number of venture capitalists are rooting for a market dip to calm the overheated start-up scene.
For the past few years, Silicon Valley start-ups have been awash in cash that has allowed them to expand quickly and sell or go public at high valuations. Yet that drove up the costs of deal making for venture capitalists, who often prefer to invest in young companies at lower prices in the hopes of making a bigger return later.
Now, some of these investors may get their wish for a market decline. Stocks tumbled late last year, led by tech giants such as Facebook and Apple, amid fears of slowing economic growth and a trade war with China. And so far this year, the stock market has had wild swings, whipsawed by confusing signals including Apple’s disappointing iPhone sales in China and American employers adding more jobs than expected last month.
It takes time for choppiness in the stock market to ripple out to the start-up market, but many venture capital investors are already preparing for a downturn. Some are setting aside money to pounce on investments and are preparing to write bigger checks with the expectation that new investors who flooded in recent years would flee. And they are keeping closer tabs on companies that were too expensive to invest in last year.