Apple blames low iPhones sales battery replacement offer: Apple issued a press release on Wednesday, Jan. 2, 2019, in which the company announced it was lowering its revenue guidance for its first quarter of its staggered fiscal year, ending in December.
Apple's share fell in trade after trading, just minutes before the announcement. Apple CEO Tim Cook wrote a letter to investors, which accompanied the press release. He also spoke Wednesday afternoon with CNBC to answer questions regarding the quarter and revised forecasts.
Tim Cook said most of the failure was based on iPhones sales.
Apple blames low iPhones sales battery replacement offer
The lower-than-expected sales of iPhones, mostly in mainland China, are half of the gap compared to expectations and even more so on the annual comparison. "Said Tim Cook in his letter.
"In fact, non-iPhone divisions (Services, Mac, iPad, Wearables / Home / Accessories) grew by almost 19% over last year."
The letter gave many explanations about the low sales of iPhones in the first quarter: Tim Cook mentioned broader challenges, such as the sale of expensive phones in emerging markets, the evolution of the strength of the dollar and including , the relative lack of people who wanted to upgrade to a newer iPhone version.
But Tim Cook also mentioned another factor: "Some customers are taking advantage of dramatically reduced prices for replacing the iPhone battery."
The controversy over the limitation of the iPhone
Last year, Apple reduced the price of the iPhone battery replacement not covered by the $ 79 to $ 29 guarantee "for anyone with an iPhone 6 or older version whose battery needs to be replaced, available in the whole world until December 2018. "
However, the reason for this one-year offer was that Apple was caught intentionally slowing down iPhones with older batteries.
In December 2017, Geekbench's new data had corroborated long-held theories that replacing the battery of an older iPhone could dramatically improve its performance. This suggested that a software limitation was slowing the processing speed of older devices. And just days after the release of Geekbench's report, Apple said they actually limited the performance of older iPhones to prevent them from shutting down unexpectedly.
While Apple thought it had the right to intentionally lower the performance of the iPhone to save battery power, at that time, the company had to face the indignation of a lot of consumers. So she published an offer at the end of her letter to customers: for a year until December 31, 2018, they could go to an Apple Store and replace the battery of their iPhone for only 30 dollars (or 29 euros) .
Apparently, enough people have taken advantage of this "significant price cut" on replacing the iPhone battery to reduce Apple's net profit during the first quarter of its offbeat year.
RELATED: Apple's price-deferred iPhone battery replacements have been very successful - 10 times more people have replaced their batteries than normal
Last winter, Apple was confronted with one of its most difficult scandals.
People have discovered that Apple has updated its iPhone software to slow down the maximum speed of its processor and preserve the battery of its old devices.
This revelation caused an uproar. One of the earliest conspiracy theories about Apple, which says the company is slowing down old phones with software updates, seemed to be true.
To answer this controversy, Apple has decided to lower the price of some battery replacements for a limited time, from 89 euros to 29 euros. This decision was taken for many reasons, including to regain consumer confidence and avoid pending class action lawsuits against the software.
And presumably, people took advantage of the offer. Apple has replaced 11 million batteries in 2018 as part of this program, wrote John Gruber of Daring Fireball blog on Monday, quoting Apple CEO Tim Cook at an internal meeting. According to John Gruber, Tim Cook is quoted as saying that Apple would normally have replaced 1 million to 2 million batteries.
The number of battery replacements is not surprising. In January 2018, shortly after the announcement of the program, Apple stores were criticized by customers looking for new inexpensive batteries, Business Insider had explained. Some stores had to set up sorting systems, with stations or tables dedicated to helping people who wanted to replace their batteries, said store employees.
Gruber says battery replacement program could have affected iPhone sales - the company announced a drop in sales, saying early this month it had generated $ 5 billion ($ 4.37 billion) ) less revenue in the first quarter compared to investor forecasts. The battery replacement program was even quoted in Tim Cook's letter to investors as one of the reasons for this lack.
This is indeed possible if a large percentage of the 11 million people who changed their battery decided not to buy the new iPhone models of last year, saying that a new battery makes their old phone more new . But it also underlines the strong consumer demand for smartphone battery replacement and the fact that Apple's high prices for changing batteries can also persuade people to buy a new iPhone.
Apple's 29-euro battery replacement program is over, but it has quietly cut prices for battery replacements that are not covered by the warranty: you just need to pay 69 euros to replace the battery of an iPhone released on last year and 49 euros for older iPhone models.