US retail company Target stated that declining Apple sales was one of the reasons for the double-digit decline in electronics revenues during the previous quarter.
This week, Target reported downbeat results for the second quarter, singling out its electronics segment for causing a “significant drag”, which is equivalent to 70 basis points of a 1.1% decline in total revenues in comparison to the same quarter in the previous year.
According to the Chief Executive Officer of Target Mr. Brian Cornell, the dwindling Apple product demand had a substantial effect on electronics earnings. Moreover, one-third of the slowdown in the company’s electronics segment can be attributed to the 20 percent drop in the sales of Apple.
The financial results of Target should not be surprising, given the across the board plunge in Apple’s hardware sales for given period. The sales of iPhone were down by 16 percent, Macs were down by 12 percent, and iPads were down by 19 percent in comparison to the prior year.
Still, the figures emphasize how crucial the upcoming iPhone 7 is, not just for the Cupertino, California-based tech giant but also for retail companies. This development raises questions regarding the wisdom of the rumored decision of the iPhone maker to be holding off on major upgrades to its flagship device until next year.
The Target CEO pointed out that the retailer aims to reverse the trend of this quarter in the latter part of 2016. Even though Cornell did not specify a release date for the new iPhone, the tech giant has typically rolled them out in the month of September.
A minor upgrade may not be positive news for Target and it is something that the executives of the retail corporation have raised with Apple.
The CEO of target explained that the plunge in current sales of the iPhone was because consumers were “looking for the newness and the innovation”.
According to Cornell, “We are putting together plans with Apple and our merchandising teams to make sure we are ready to take advantage of that in the back half of the year.”
“We are ready to capitalize on their new innovation that they will be bringing to market. But again … we have to improve electronic performance,” he further added.
The latest rumors imply that the Cupertino, California-based tech titan will launch the new iPhone on the 16th of September. Although the upcoming iPhone will have a similar appearance as the existing version, the iPhone maker is reportedly adding a new home button that features haptic feedback. This feature is the same as that of the Apple Watch and MacBook. Aside from that, Apple Inc. my also be integrating two speakers and dual cameras. However, what is probably the most talked about speculation is its plan to eliminate the 3.5 mm headphone jack.