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Alex Webb

Apple Had Five Ways to Fuel Earnings. Only One Still Works

A changing smartphone market calls for new strategies to boost profit. Most of what Apple tried has run out of steam.

A super-expensive iPhone and economic weakness aren’t a great mix.

A super-expensive iPhone and economic weakness aren’t a great mix.

Photographer: GREG BAKER/AFP

If it weren’t for that darn trade war, Apple Inc. might just have squeaked through. In the three years or so since it became clear that global smartphone sales were slowing, Chief Executive Officer Tim Cook has deployed five key strategies to maintain earnings growth. After Wednesday’s cut to the sales outlook, it’s clear that only one has unquestionably succeeded.

As unit sales slowed, Apple has kept revenue ticking up by boosting the iPhone’s average sales price. It hit a staggering $793 in the three months through September, up from $618 a year earlier. Unfortunately, that seems also to have made it particularly vulnerable to economic weakness, most obviously in China. Consumers with a perfectly serviceable iPhone 8 are less likely to want to spend as much as $1,449 on a top-of-the-range iPhone XS Max.