Apple has more than cheaper iPhones up its sleeve as investors start to tuck in again

Cutting the price of Apple's signature product in some market is a sensible move by CEO Tim Cook, but it may not stem the tide of falling sales. Even though the outlook for the tech giant is unusually cloudy, shareholders are still finding reasons for optimism

Apple's iPhones: Their price is set to fall in some markets as the company tries to address falling sales (Getty Images)

Is Tim Cook preparing to take a bite out of Apple’s unfathomably juicy margins?

The tech giant has just released the figures for the first quarter of its financial year, which ended December 29, and they were every bit as disappointing as expected.

Given that the company had already taken the hit though warning of what was to come, the focus was understandably on Cook’s plan for addressing the company’s (relative) malaise.

The most eye catching part of that was a plan to cut the price of the company’s slowing signature product, something that has happened just once before.

The the price of the already expensive iPhone has been pushed into the ridiculous bracket in important markets such as China by the strength of the US dollar, to which it is pegged.

Cook told the Reuters news agency that he’s going to "adjust" prices in some markets to the level they were at a year ago in local currencies.

Those of us paid in bombed out sterling shouldn’t get our hopes up just yet. He didn’t specify which markets, although China is a racing certainty.

But such a move makes all kind of sense, particularly in the aforementioned where local champion Huawei has been putting out whizzy competing handsets to tempt patriotic Chinese buyers.

Apple has been squeezing its consumers for a long time. Will this be enough to stop the pips from squeaking?

The talk of prices being ‘slashed’ certainly looks over done. The iPhone is going to remain a pricey piece of kit, and recent upgrades have been obeying the law of diminishing returns.

The phenomenon of people changing their handsets less often is an industry wide one, and it’s an open question as to whether relatively limited price cuts in some markets will be enough to turn back that particular tide.

The reason investors have less reason to be concerned than it might appear is that the iPhone is not the only string to Apple’s bow.

A notable feature of the results was that while revenues from sales of the device fell by 15 per cent, group revenues fell by just 5 per cent as other parts of the business grew.

The money taken in from selling Macs increased by 9 per cent, wearables, home and accessories (iWatches, speakers, headphones) put on 33 percent, the iPad 17 per cent.

The most important, and closely watched, line was, however, services. Think Apple Music, cloud storage, the App store and so on.

The gap between the revenues that unit produces and those from Apple’s various products is enormous. But it is closing, and the margins are stunning.

Apple’s shares have lost nearly a third since October, driven by a widespread tech tumble as well as its own problems. It has also surrendered its much vaunted status as the world’s biggest company by market value. Accustomed to dazzling investors, the weather looks set to be cloudy for some time to come and full year revenues will likely be down on last year.

Still, Cook is sitting on a near $250bn cash pile, and the stock’s fall may have been over done. Big investors seem to think so. They’ve started to order portions of Apple pie, scenting a buying opportunity at the current levels. They may well be right about that.