SAN FRANCISCO (AP) — Apple could soon face one of its biggest challenges to date: Peak iPhone.
Most analysts believe Apple surpassed its own record by selling more than 74.5 million units of its flagship product in the final three months of 2015. But there are signs that iPhone sales in the first three months of 2016 will — for the first time ever — show an abrupt decline from the same period a year earlier.
That could mark a pivotal moment for the Silicon Valley giant. Apple is the world’s biggest company, in terms of stock value, thanks to the iPhone’s surging popularity around the world. In business terms, Apple makes most of its money from iPhone sales.
But concerns about slowing growth have sent the stock into a months-long slump, fueling debate about what kind of company Apple will be in the future.
The iPhone contributed nearly two-thirds of Apple’s $234 billion in revenue last year. None of the other new products Apple has launched in recent years have emerged as blockbusters. That’s led some critics to suggest Apple has lost its innovative touch, while others say it’s evolving to depend on a broader base of related tech products and services.
One thing is clear, said analyst Angelo Zino at S&P Capital IQ: “Last year was an unprecedented year for Apple and the iPhone…. You’ll never see that type of growth from the iPhone again.”
When CEO Tim Cook reports Tuesday on Apple’s sales for the last three months of 2015, investors will be watching closely for any hints about how Apple’s signature smartphone is faring in the current quarter. Sales usually fall somewhat after the holiday shopping season. But analysts say it appears Apple has cut production orders from key suppliers in recent weeks, suggesting it’s lowered its own forecasts.
Apple hasn’t commented on iPhone sales since last fall, when Cook struck an upbeat tone. In part, Zino and other experts say, the company is suffering from its own success. Apple sold 61 million iPhones in the March quarter of 2015, or 40 percent more than it did a year earlier. To match that growth rate, Apple would need to sell more than 85 million in the current period. Instead, analysts are expecting around 55 million.
An estimated 500 million people own iPhones now, which means Apple can rely on a significant number to upgrade each year. But some have put off buying a new model because they didn’t see a strong reason to upgrade.
Despite some new features, “people are feeling like there hasn’t been anything that’s really new” in the latest iPhone models, known as the 6S and 6S Plus, which came out last fall, said market researcher John Feland of Argus Insights.
Apple will likely make significant changes in the next major iPhone release, expected in September, which could fuel another surge in sales. Some tech blogs have reported a new model might even be coming this spring.
The company went through a similar cycle a few years ago, when iPhone sales growth slowed to 7 percent in the final months of 2013. The next year, Apple introduced new models with significantly bigger screens. That sent sales skyrocketing, especially in Asia, where consumers had previously flocked to buy big-screen phones from rival Samsung.
But there may no more equally dramatic changes left to jump-start sales like that again. “Apple really pulled the big lever they had left un-pulled, up to then,” said tech analyst Jan Dawson of Jackdaw Research. “That was sort of a one-off event.”
While iPhone sales may be slowing, Apple has launched other products and services tied to the iPhone — from the Apple Watch to the digital payments service known as Apple Pay, the subscription-based Apple Music and “smart home” software that lets users control their lights and appliances with Siri, the voice-enabled digital assistant on the iPhone and iPad. These are designed to make the iPhone itself more useful, while producing a steady stream of new revenue.
None of those new products have sold like the iPhone itself, however. Sales of the iPad have been declining for two years.
“Apple still has a lot of value, a lot of cash flow, so it’s not to say the company is in trouble. But it’s difficult to say that it’s on the cutting edge,” said Murillo Campello, a finance professor at Cornell University who follows Apple closely.
Others say it’s premature to count Apple among former tech giants, like Hewlett-Packard, that have struggled for relevance as their pace of growth and innovation declined.
Apple is working on a wide range of future products, from streaming video to virtual reality and even self-driving cars, said FBR Capital Markets’ analyst Daniel Ives in a recent note to clients.
“Apple’s often surprised us with what they end up doing,” added Dawson.
SAN FRANCISCO (AP) — Four of Twitter’s key executives are leaving the company in an exodus that has escalated the uncertainty facing the messaging service as it struggles to broaden its audience and lure back disillusioned investors.
Twitter CEO Jack Dorsey announced the management shake-up late Sunday after technology news site Re/Code reported the changes earlier in the day.
Dorsey described the departures as voluntary, a characterization that three of the four exiting executives echoed in their own posts.
The upheaval leaves Twitter without its top engineering executive, Alex Roetter; its top products executive, Kevin Weil; its head of human resources, Skip Schipper; and Katie Stanton, who oversaw the company’s media partnerships.
Dorsey is turning over supervision of the human resources and media teams to Twitter’s chief operating officer, Adam Bain, and assigned engineering to the company’s chief technology officer, Adam Messinger. Bain and Messinger will share some of the responsibilities for creating and running Twitter’s various products.
This is the second major fissure in Twitter’s ranks since Dorsey was named the San Francisco company’s permanent CEO in October. His hiring followed a three-month stint as interim CEO after the resignation of his predecessor, Dick Costolo.
In one of his first moves, Dorsey laid off more than 300 employees, or about 8 percent of Twitter’s workforce, to trim expenses at a company that has never turned a profit since its service started nearly a decade ago.
It’s not unusual for CEOs to reshuffle management shortly after their arrival.
But analysts interpreted Twitter’s changes as a distress signal instead of a reason to hope that the company is starting to head in the right direction.
“We don’t see how the departure of the heads of three major business divisions can be viewed as a positive in the middle of an attempted business turnaround,” Stifel analyst Scott Devitt wrote in a research note. Devitt had been recommending Twitter’s stock before the management departures prompted him to reverse his opinion.
In another note, Citi analyst Mark May said the defections may prolong Dorsey’s attempt to turn around Twitter and could hint at problems that may surface Feb. 10 when the company is scheduled to report its results for the final three months of last year.
Twitter’s stock shed 82 cents, or more than 4 percent, to close Monday at $17.02. The shares have plunged by 53 percent since Dorsey became interim CEO last July, pushing them well below their price of $26 when they were sold in an initial public offering in November 2013.
The downturn reflects concerns that Twitter isn’t going to get much bigger than it is now, after a long streak of torrid growth in its early years. Twitter’s active users grew from 308 million in March to 320 million in September, a measly gain compared to the much larger Facebook, which added 104 million users during the same span. Facebook has more than 1.5 billion active users.
Twitter is trying to make its service more appealing with a feature called “Moments” that compiles photos, video and messages about big news events. Twitter also is considering expanding the restrictions on tweets beyond the 140-character limit that has defined the service since its debut.
Now, Twitter’s board appears ready to undergo a makeover that Dorsey has been hinting would happen.
Citing unidentified people familiar with the matter, both The Wall Street Journal and The New York Times reported Twitter is about to name two new directors, including a well-known media executive, to its eight-member board. It’s not clear which of Twitter’s current directors will leave.
Twitter last year named a former Google executive, Omid Kordestani, as its executive chairman.
Although the changes will probably increase the turmoil within Twitter, Gartner Inc. analyst Brian Blau believes they’re necessary.
“Losing a pretty significant chunk of their management team should open the door to even more changes,” Blau said. “This is a signal that they are planning to do something different, and that could be good. It’s pretty obvious that something is not working there.”
ALBUQUERQUE, N.M. (AP) — It has been a year since two pilots from the U.S. and Russia lifted off from Japan with the aim of flying farther and longer in their gas balloon than anyone in history.
They did it, and a documentary about their record-breaking flight across the Pacific Ocean will premiere Feb. 6 in Albuquerque.
The city and the Anderson-Abruzzo Albuquerque International Balloon Museum produced the film, which was compiled from hours of video gathered before and after the Two Eagles flight.
The filmmakers said one of the challenges was the shortage of footage from launch preparations in Japan and the flight itself.
Pilots Troy Bradley and Leonid Tiukhtyaev took photos and video while aloft, but much of the material was lost when they touched down just off the coast of Baja, Mexico. Some of the team’s memory cards were rendered unreadable after being exposed to the salt water.
Bradley has previewed the film.
“It was really nice because I got a totally different perspective than from where I was at,” he said. “There’s a lot of filming within the command center, the crew once they arrived in Mexico before we landed, a bunch of stuff I had never seen.”
Filmmaker Bert Johnson said for the parts where footage was sparse, the crew used the best resources available: Bradley and Tiukhtyaev.
“After all, they lived it,” he said. “This is the story of their adventure, told by them.”
The two pilots traveled more than 6,650 miles (10,700 kilometers) and for a duration of 160 hours and 34 minutes.
The flight ended just after sunrise on Jan. 31, 2015, when the Two Eagles balloon touched down a few miles off the coast, about 300 miles north of Cabo San Lucas, Mexico.
The men beat a 137-hour duration record set in 1978 by the Double Eagle crew in a cross-Atlantic flight. They also exceeded the distance record of 5,209 miles set by the Double Eagle V team during the first trans-Pacific flight in 1981.
The pilots will be in Washington, D.C., in March to accept the Harmon Aeronaut Trophy from the National Aeronautics Association. They’re also in the running for some of ballooning’s other prestigious awards.
“It’s been a wonderful year,” Bradley said.
WASHINGTON (AP) — The Smithsonian Institution’s museums in Washington and the National Zoo will remain closed Monday as the nation’s capital digs out from an epic snowstorm.
They closed at noon Friday and remained closed Saturday and Sunday as the storm dumped nearly 2 feet of snow. One measurement near the zoo recorded 22.4 inches.
Zoo staffers are busy behind closed doors. Associate Director for Animal Care Services Brandie Smith says about 30 workers stayed over to take care of the creatures.
Some animals had to be kept in their housing because if they went out, they might climb on drifts and escape. Others went out to play in the snow, notably male giant panda Tian Tian. The zoo tweeted a video of him frolicking in the snow that went viral.
TOKYO (AP) — A Japanese rocket maker said Monday that a large piece of metal that washed up on a beach in Thailand is likely part of a rocket launched by Japan, not a missing Malaysian plane.
The discovery of the metal sparked speculation that it might be from Malaysia Airlines Flight 370, which disappeared almost two years ago.
Mitsubishi Heavy Industries said the metal piece is “highly likely” to be part of a Japanese H-IIA or H-IIB rocket that was launched from southern Japan, based on an initial examination of photos and videos of the object.
Company spokeswoman Sayo Suwashita said officials are trying to determine which rocket and its launch date. Rocket debris falls into the ocean after every launch, and most is collected but sometimes pieces can be found some distance from the launch site, including in foreign waters, she said.
Thai air force and civil aviation authorities said Monday they were unaware of the statement from Japan, while the agency within the Transport Ministry that investigates aviation accidents was unavailable for comment.
Japan has launched H-IIA and H-IIB rockets since the 2000s. The most recent H-IIA launch was in November 2015.
Flight 370 took off from Malaysia in March 2014. It lost communications and made a sharp turn away from its Beijing destination before disappearing. It is presumed to have crashed in the southern Indian Ocean, far away from Thailand.
The debris was found on the eastern coast of southern Thailand’s Nakhon Si Thammarat province, about 370 miles (600 kilometers) south of Bangkok on the Gulf of Thailand.
Malaysian Transport Minister Liow Tiong Lai said Sunday that the search for the missing jet, which carried 239 people, is ongoing in the Indian Ocean and that its second phase is expected to be completed by June. Australia has led a multinational search that has so far cost more than $120 million.
Aviation experts from Malaysia visited Nakhon Si Thammarat on Monday to inspect the metal piece, after which the Thai air force flew it to Bangkok for further examination.
The Australian Transport Safety Bureau announced Monday that the search of 120 square kilometers (46,000 square miles) of seabed where the Boeing 777 is thought to have crashed had been set back after a ship lost its sonar equipment.
The Fugro Discovery, one of three ships conducting the search, towed its side-scan sonar unit on Sunday into a mud volcano that rose 2,200 meters (7,200 feet) from the sea floor, the bureau said in a statement.
The ship lost the sonar unit plus 4.5 kilometers (14,800 feet) of cable. The ship is now making a six-day journey to the Australian port of Fremantle to collect new cable and will continue the search with spare sonar equipment, it said.
Associated Press writers Grant Peck in Bangkok, Eileen Ng in Kuala Lumpur, Malaysia, and Rod McGuirk in Canberra, Australia, contributed to this report.
MARION, Iowa (AP) — To Bernie Sanders, President Barack Obama’s improbable victory in the 2008 Iowa caucuses was a testament to the power of an inspirational underdog. To Hillary Clinton, Obama’s win over her eight years ago proved the importance of a robust and refined political apparatus.
The Democratic presidential candidates’ theories are driven in part by necessity — Sanders’ has undeniable energy heading into the final week of campaigning in Iowa, while Clinton has a massive field operation that’s been on the ground for nearly a year. But they also reflect their competing visions of what Democratic voters are seeking in the 2016 election.
Sanders is running on a pledge of political revolution, one that builds on what he sees as the country’s great moments of change: the rise of trade unions, the legalization of gay marriage, and yes, Obama’s unexpected victory in the 2008 Iowa caucuses.
“Eight years ago, all over this country people said an African-American becoming president of the United States, you’re nuts, that can’t happen, too much racism in America,” Sanders said during a campaign stop Saturday. “And you think he’s going to win in a very white state? Ain’t going to happen. You made it happen. You made history.”
Clinton believes Democrats are looking less for another big moment of change and more for a steady hand who can build on Obama’s progress, but perhaps be more adept at managing Washington’s grinding gridlock.
“I believe I have the experience, the judgment and the vision to get us back moving, further than we got with President Obama,” Clinton said Sunday during an event in Marion.
Later Sunday at a rally in West Des Moines, Clinton appeared to take a page out of Sanders’ playbook, telling voters: “We are going to form a great political movement that will make it clear what’s at stake.”
Of course, Obama was successful in 2008 because he had both an inspirational message and a top-notch political organization. The Feb. 1 Iowa caucuses will be the first test of whether voters want Sanders or Clinton to follow him.
In a year when voters appear eager to abandon the political elite, Clinton — a former first lady, senator and secretary of state — has embraced her standing as the favored candidate of the Democratic establishment.
Several senators were campaigning in Iowa on her behalf, including New Jersey Sen. Cory Booker, who introduced Clinton at an event in Marion Sunday. The heads of Planned Parenthood and the Human Rights Campaign, one of the largest gay rights organizations, also joined Clinton on the campaign trail Sunday.
While Obama was an underdog in the 2008 race, he did have significant support among state and national officials. Sanders has not been endorsed by any of his fellow senators, nor does he have the backing of any prominent Iowa officials.
Asked whether the backing of Democratic officials matter, Sanders’ campaign manager Jeff Weaver said: “People matter.”
The people that matter most to the Sanders campaign are the same ones who backed Obama in 2008. His campaign is banking on a similar coalition of young people, independents and first time caucus-goers to propel Sanders to victory.
Larry Kilburg, 64, of Bellevue, Iowa, said he planned to caucus for the first time for Sanders. “I think this year there’s going to be a lot of newbies,” he said.
In a direct appeal to Obama’s Iowa coalition, Sanders says the same attacks Clinton is levying on him were tried on the president, too.
“Eight years ago Obama was being attacked. He was unrealistic. His ideas were pie in the sky. He did not have the experience that was needed,” Sanders said. “But you know what, people of Iowa saw through those attacks then and they’re going to see through those attacks again.”
Fueled by his robust fundraising, Sanders has built a large organization in Iowa, with 103 paid staffers on the ground, as well as 15,000 volunteers, according to his campaign. But he got his foothold in the state later than Clinton, who has had professional staff in the state since last spring.
The Clinton campaign has not offered an official staffing number in the state in several months, but it is now well above the 78 paid people they said they had back in September. And the Clinton staff has been diligently knocking doors and organizing in cities and small towns.
Still, Sanders spokesman Michael Briggs said he was confident in the “enthusiastic workers and volunteers.” A YouTube video released by Sanders’ Iowa organization on how to caucus — with participants explaining the rules and acting out a mock caucus — has had over 61,000 views since Thursday.
Clinton and Sanders planned to spend most of the week leading up to the caucuses in Iowa, eager to parlay a win here into momentum heading into New Hampshire’s primary. Sanders has built a solid lead in New Hampshire, while Clinton’s campaign is banking on strong showings as the race heads toward states like South Carolina and Nevada that have more racially diverse populations.
Follow Julie Pace at http://twitter.com/jpaceDC and Catherine Lucey at http://twitter.com/catherine—lucey