The iPhone 6 and 6 Plus were extremely successful product launches, breaking records by selling a total of 10 million units in their first three days. This is, of course, great for Apple; but it may also foreshadow a huge problem for the company in the very near future.
These strong sales numbers may be causing a “super cycle,” as Wamsi Mohan, an analyst at Bank of America Merrill Lynch, explained in a note to investors:
Earnings for companies such as Apple tend to be cyclical, with a wave of higher earnings followed by a wave of lower earnings. Because the iPhone 6 was so successful, the company is currently experiencing a wave of extremely high sales. Mohan predicts that it will be followed by a wave of extremely low sales.
Since so many people recently bought the iPhone 6, demand for the new iPhone, which is expected to launch in September 2015, will be much lower since customers won’t feel the need to replace their phones after just a few months.
Some think that this super cycle could be a problem for Apple sales in China in particular. After the iPhone 6’s roaring success in December of last year, Apple has already been demoted from the top selling smartphone in China to number three. This could either mean bad news for Apple sales in that country, or it could simply be part of the natural product cycle. CEO Tim Cook, for one, is confident about Apple’s success in the Chinese market.