The retail sale of Apple Inc. (NASDAQ:AAPL) in 2014 grew a mere 6% to $21.5 billion and the last year’s growth was just 7%. This growth is nothing compared to the huge growth Apple had seen in prior years. In 2012 the company saw a growth by 33%, in 2011 44% and in 2010 47% growth was seen by the tech giant. It seems Apple is taking these figures and changes in growth quite seriously and is thinking of making changes in its retail policies.
Apple’s products that do not have independent market value get divided into two categories. On Monday Cuopertino, California based company said that Apple from the beginning of the first quarter will discontinue its separate line of iPod. Since iPod is not as popular as it used to be and the product is not in demand anymore, therefore Apple will add iPod along with some other products into the category of “other products” and these product will not be mentioned on the balance sheet anymore. Instead the products in the “other category” will show revenue as a whole and not as individual products. Some other Apple products that will be considered as “other” will be Beats headphones, Apple TV, some accessories and the highly awaited Apple watch.
Apple watch which is not even out and yet it will be considered as “other” product. Apple has probably studied the market and knows that the product may not as popular amongst the customers as the company would have liked it to be. Therefore Apple decided not to launch it as an independent product. However Tim Cook, Apple’s CEO was heard saying that this decision has nothing to do with the company’s expectation of the Apple watch.
Another category of Apple Inc. is the “services”. iTunes, software services, apps and cloud services fall under this category and Apple’s new idea of Apple Pay will also be a part of “services”.
Tim Cook said that the company after looking at the revenue decided to put everything together in one category besides the Mac, iPad and iPhone. He also said that in the first quarter the company has decided not to ship any Apple Watches. Cook did not reveal any numbers related to Apple Watch saying that he didn’t want the competitors to get any ideas.
However the fact that Apple has added its Apple Inc. (NASDAQ:AAPL) watch in “other” category shows that the company is not too excited about the product. The watch will be Apple’s first wearable. An analyst at Morgan Stanley, Katy Huberty had predicted that Apple could have sold about 60 million smart watches in just the first year of its launch. But the way Apple is behaving and the fact that the company stayed away from the numbers indicates uncertainty on the part of the company, which might also reflect on sales. According to analysts Apple has the potential of changing the market of the wearables, but the wearables market will not become as huge as that of the smartphones overnight. Apple’s current behavior shows that the company is not being too patient about the change it can bring in long run.
After the sales for the September quarter were revealed it was seen that everything exceeded expectations except the iPad sales, which dropped for the third time consecutively. Apple has categorized its products to minimize the slowing profit and revenue growth. Two-third of Apple’s sales is derived from iPhones and iPads but because of the growing competition the market is getting divided. That is why Apple is making these changes and more changes can occur in company’s policies in the future.
