I knew Apple was dead 3 years ago when I figured out how they were achieving these crazy sales/ shipments record. The reason why Apple is struggling is because their multi year deal with the CARRIERS is OVER. Its that Simple you can stop there. They all bet BIG on the IPhone. The carriers scammy subsidy meal ticket is gone. Those free Iphones on contract werent free because Apple was making $500 per unit sale. The carriers bought them from Apple for the price you see the old iphones selling for on the Apple site then turned around offer them for free with a million fine prints. those free phones is what made Apple rich. "Apple routinely requires new iPhone carriers to commit to purchasing a certain number of iPhones over a period of years, a requirement that has led some carriers to balk at offering the device."Year 2012
--> "It was reported last year that Sprint agreed to purchase 30.5 million iPhones from Apple for nearly $20 billion over the next four years
This deal ends in 2016 aka this year this is why Apple projection is lowered. There is no sales boost coming from the carriers or from subsidy. The carriers ended contracts and subsidy aka free cash from scamming buyers. see here http://www.cbsnews.com/news/verizon-kills-phone-subsidies-and-apple-should-worry/
"But just like free lunches, neither were the smartphones free. Built into the carrier's monthly fees was a portion allotted internally at the handset makers to pay off the phone. Consumers would eventually pay more for the phone than it would have cost to buy it outright at retail.
However, the full price was effectively invisible to the consumer. The presentation made the cost far more palatable to buyers and allowed Apple and others to more easily sell the expensive handheld computer-phone combinations and boost their sales." Remember those Free Iphones on a 2 year contract? well apple was still making 550$ off each sale the carriers made their money back via pricey contracts on those free phones. it was a win -win.in 2010 and 2012 Android wasnt a real threat sales wise or commercially pre - Galaxy S3 so the carriers went all in with Apple. They didnt see the future
The Wall Street Journal characterized the deal as a move that "bet the company" on the iPhone. Hesse believes the major upfront investment taken by Sprint to offer the iPhone will pay for the company in the long term, bringing in higher value customers to the third-largest carrier in the U.S. The carrier sold 1.5 million iPhones in the first quarter of calendar 2012, and another 1.8 million in the holiday quarter that concluded 2011, and more than 40 percent of those sales were to new subscribers.
Sprint's investment has been made on the belief that iPhone users are "more profitable" than other customers, such as those who buy smartphones running the Google Android operating system. Hesse previously said that iPhone users use less data on average than other smartphone customers, which costs network operators like Sprint less money."Verizon
"Bloomberg yesterday reported on a research note from analyst Craig Moffett pointing out that Verizon could potentially face a massive bill from Apple of up to $14 billion this year based on current iPhone sales rates and the carrier's commitment to purchase a minimum number of iPhones from Apple. Under a multiyear deal signed with Apple in 2010, Verizon Wireless is obligated to buy $23.5 billion worth of iPhones in 2013 alone, according to Craig Moffett, a telecommunications analyst who left Sanford C. Bernstein & Co. earlier this year to start his own research firm. Since the purchase commitment is more than twice what Verizon Wireless sold in 2012, the company may have a shortfall of $12 billion to $14 billion, worth $4 to $5 per share, Moffett said in the report. Apple routinely requires new iPhone carriers to commit to purchasing a certain number of iPhones over a period of years, a requirement that has led some carriers to balk at offering the device.