Have iPhone Sales Peaked? Analysts Predict a Slump Ahead
This article by Selina Wang for Bloomberg may be of interest to subscribers. Here is a section:
Morgan Stanley lowered its forecast for iPhone unit sales and now estimates a drop of 6 percent in fiscal 2016, according to a Dec. 13 note. The decline is due to higher prices in international markets, excluding China, and maturing smartphone penetration in developed countries. China is the only market with year-over-year iPhone demand growth in the December quarter, according to the report.
JPMorgan Chase & Co. published a report the same day saying “November sales signal signs of early weakness of iPhone 6S cycle.” The bank lowered its forecast for iPhone units to 75 million to 77 million in the fiscal fourth quarter, down from a previous prediction for 75 million to 80 million units.
Drexel Hamilton analysts said in a Dec. 8 note that 97 percent of the companies included in a basket of Apple suppliers in Taiwan had reported sales that gave a weaker performance, suggesting that November revenue fell by 6 percent from the previous month and was less than the average 8 percent increase over the past nine years. Drexel predicts iPhone units to grow 4 percent year-over-year in the first quarter of fiscal 2016 and decline by 4 percent in the second quarter.
Apple has been a drag on the performance of the Nasdaq this year because despite its reasonable valuations investors do not have a clear vision for what the company’s next big “wow” product is likely to be. I’m in the Apple ecosystem but I keep app purchases to a minimum and have no intention of buying a new phone until my current 5S breaks. As a male I don’t want a big phone that does not fit in my pocket and the latest model enhancements have done nothing to whet my appetite. The share price suggests I’m not alone in that calculation.
Apple continues to test the lower side of a two month range and needs to sustain a move above $120 to indicate demand is returning to dominance beyond short-term scope for a bounce.
The share was one of only seven companies to post a negative performance today, in a rally that was led by the biotech sector.
The Nasdaq Biotech Index on the other hand bounced nicely today to push back up into the six week range as it continues to range in the region of the 200-day MA. A sustained move above 3500 would bolster the medium-term bullish argument.