Growth below a key US figure could hurt Apple's most profitable unit

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As iPhone sales become sluggish, Apple is counting more and more on the installed base of iPhones for growing its business. To move from hardware sales to work, Apple has aggressively expanded its Services business by adding Apple News +, Apple TV + and the upcoming Apple Arcade to its offerings. The Services sector is the second largest division of Apple and is the most profitable. In addition to the additions mentioned above, you will find Apple Music, the App Store, iTunes, AppleCare, Apple Pay and more under Services. Apple is looking to increase the revenue generated by this division, which has grown from $ 25 billion collected in 2016 to $ 50 billion US next year. For the second quarter ended March, Apple generated revenue of $ 11.45 billion.

So, as we have pointed out, Apple really depends on the installed base of iPhones. But there is bad news for Apple on this front; According to IBPAR (via 9to5Mac), the growth of the iPhone installed in the United States has barely moved the needle in the first quarter of 2019. According to the CIRP, this number has increased from 4 million to 193 million at the end of March, 2.1% growth over the three-month period. On an annual basis, the growth of the iPhone installed base in the United States was 12%. To show you how the growth of this key measure is slowing, sequential growth in the first quarter of 2018 was 4% and 19% year-over-year.
The growth of the installed base of Apple iPhone in the United States slows

The growth of the installed base of Apple iPhone in the United States slows

The latest figure released by Apple indicates that at the end of the first quarter of its fiscal year, closed in December, the worldwide installed base of iPhone was 900 million units. This gives Apple a large number of potential subscribers to collect recurring revenue.

"The installed base of iPhones in the United States continues to stabilize." Compared to the most recent quarters, and particularly in the last two or three years, slower unit sales and longer holding periods long periods have resulted in a net decrease in the growth of the number of iPhones in the US Of course, growth is still good, but investors have become accustomed to quarterly growth of 5% or more and to growth nearly 20% annually, prompting investors to wonder if iPhone sales outside the US will offset Apple's pressure and further encourage Apple to sell other products and services to the installed base of iPhone owners. "- Josh Lowitz, Partner and Co-Founder, CIRP

Revenue from services could be affected by attacks on so-called "Apple tax"

While Apple no longer publishes the number of iPhone units sold each quarter, it publishes figures on device revenue. During the first fiscal quarter, iPhone revenues declined by 15% year-over-year. The situation worsened during the second quarter of the fiscal year (January to March), when revenues attributed to the device decreased by 17% from one year to the next. ;other. The upgrade cycle has been extended, but if the current members of the installed base do not replace their currently used iPhone with a newer iPhone model, the installed base could begin to decline.

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