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Recession Watch: America Cannot Afford New iPhones

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… OR APPLE WATCHES

You can’t base underlying economic trends on single companies … or even single industries … but the current atmosphere of consumer discontent is unlikely to be assuaged in the aftermath of disappointing data released this week by California tech behemoth Apple.

The Cupertino-based firm shipped 51.2 million iPhones during its second quarter of 2016 – down from 61 million iPhones during the same quarter a year ago.   That’s the first ever year-over-year iPhone sales decline – which led to Apple’s first revenue decline in thirteen years.

Obviously the saturation of the smart phone market had something to do with that, but Apple CEO Tim Cook specifically referenced “strong macroeconomic headwinds” by way of explaining the decline.

Which is only going to reinforce our basic contention: Times are tight, which is forcing more people to hold off on new cell phone purchases even though prices are dropping and carriers are doing everything within their power to offer deals.

The iPhone wasn’t the only Apple product to lose ground.  The company sold 10.3 million iPads during the quarter – down from 12.6 million in the same quarter of 2015.  And while Apple doesn’t specifically release sales data for its new watches, the “other” category in which these watches are classified for accounting purposes saw a marked decline in sales growth during the second quarter.

After expanding at a 62 percent year-over-year clip during the previous quarter, “other” sales growth slipped to 30 percent during the most recent period.

In isolation, Apple’s latest data obviously isn’t terrible news (in fact it was in line with the company’s advance guidance) … but put up against a host of other troubling indicators, well … it’s obviously not going to allay any fears.

We’ve said it before, we’ll say it again: We wish we were bearers of better economic news, but we’ve got to go where the data takes us.

And increasingly in the U.S. economy, that’s a scary, scary place …

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