FBR is latest firm to cut iPhone 6s estimates, but expects 'mega product cycle' for 'iPhone 7'
Concerns over iPhone 6s sales continue to grow on Wall Street, as FBR & Co. became the latest firm to revise its estimates downward, calling on Apple to sell 75.5 million total iPhones in the current December quarter and cutting its price target to $150.
Analyst Daniel Ives also slashed his March 2016 projections from 60 million iPhone sales to 52 million, and the June 2016 from 51 million units to 47 million. Like others before him, Ive cited vague information stemming from Apple's supply chain as an indicator that sales of the iPhone 6s series may be slower than expected.
"While 6s demand has not been stellar out of the gate relative to bullish Street expectations, we believe this near-term product transition period will ultimately lead to brighter days ahead on the shoulders of the flagship iPhone 7 release, as Apple is poised to benefit from pent-up consumer demand/mega product cycle heading into September 2016," Ives wrote.
The analyst's latest projections call for iPhone sales to be up slightly fro the 74.5 million iPhones the company shipped in the December 2014 quarter. But sales of 52 million iPhones in the March 2016 quarter would be a steep decline from the 61 million Apple shipped in the same period of 2015, while 47.5 million in June 2016 would be about flat with the year prior.
Ives and FBR join a parade of firms who have expressed concern over iPhone sales in recent weeks. The trend has been largely driven by estimates being cut by a number of key Apple suppliers.
Still, most analysts continue to be bullish on the long-term prospects for Apple, Ives and FBR included. The firm has maintained a recommended "outperform" rating.
Though Ives still believes investors should buy in, he reduced his price target on shares of AAPL from $175 to $150.
"With only 30%-plus of Apple's user base upgrading to the iPhone 6/6s to date, there is a massive green field opportunity to further penetrate its unrivaled customer base over the coming years, with China remaining the fuel in the tank for Cupertino going forward," he said.
Other investment firms that cut estimates in recent weeks include RBC Capital Markets, J.P. Morgan and Morgan Stanley.
Gene Munster of Piper Jaffray, meanwhile, advised investors not to worry about supplier data, indicating it's unwise reading heavily into vague estimates. His sentiment echoed statements from Apple Chief Executive Tim Cook, who said back in 2013 that investors should not read too much into supply chain data.
"The supply chain is very complex, and we obviously have multiple sources for things," Cook said. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."
Analyst Daniel Ives also slashed his March 2016 projections from 60 million iPhone sales to 52 million, and the June 2016 from 51 million units to 47 million. Like others before him, Ive cited vague information stemming from Apple's supply chain as an indicator that sales of the iPhone 6s series may be slower than expected.
"While 6s demand has not been stellar out of the gate relative to bullish Street expectations, we believe this near-term product transition period will ultimately lead to brighter days ahead on the shoulders of the flagship iPhone 7 release, as Apple is poised to benefit from pent-up consumer demand/mega product cycle heading into September 2016," Ives wrote.
The analyst's latest projections call for iPhone sales to be up slightly fro the 74.5 million iPhones the company shipped in the December 2014 quarter. But sales of 52 million iPhones in the March 2016 quarter would be a steep decline from the 61 million Apple shipped in the same period of 2015, while 47.5 million in June 2016 would be about flat with the year prior.
Ives and FBR join a parade of firms who have expressed concern over iPhone sales in recent weeks. The trend has been largely driven by estimates being cut by a number of key Apple suppliers.
Still, most analysts continue to be bullish on the long-term prospects for Apple, Ives and FBR included. The firm has maintained a recommended "outperform" rating.
Though Ives still believes investors should buy in, he reduced his price target on shares of AAPL from $175 to $150.
"With only 30%-plus of Apple's user base upgrading to the iPhone 6/6s to date, there is a massive green field opportunity to further penetrate its unrivaled customer base over the coming years, with China remaining the fuel in the tank for Cupertino going forward," he said.
Other investment firms that cut estimates in recent weeks include RBC Capital Markets, J.P. Morgan and Morgan Stanley.
Gene Munster of Piper Jaffray, meanwhile, advised investors not to worry about supplier data, indicating it's unwise reading heavily into vague estimates. His sentiment echoed statements from Apple Chief Executive Tim Cook, who said back in 2013 that investors should not read too much into supply chain data.
"The supply chain is very complex, and we obviously have multiple sources for things," Cook said. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."
Comments
The stock is up almost a buck today, go figure.
There is demand but most people will rather wait for the new model to be released in September. This will lead to a lighter 2 quarters leading to the release and a much heavier few quarters after the release.
iPhone 7, to be followed by iPhone 8, 9, 10
Wall st won't know what the heck to do.
I think Cook really does not care that much about the stock price. It does not effect the operation of the company. I am sure he would much prefer it be a private company at this point. It is just one of the annoying outside distractions he has to live with.
Cook ALREADY HAS covered this on the earnings calls -- said very clearly not to gauge demand by vendor forecasting. already has. there is no reason for him to address it every time it happens. then they'd expect him to address any and all rumors. that isn't how Apple rolls and you know that.
grow up.
One of the things overlooked is the iPhone Upgrade Program:
- Unlocked carrier-agnostic iPhones
- Upgrade to a new iPhone every year
- Interest-free financing
- Lower monthly rates than carriers
- No ETA's
We purchased 4 iPhone 6s under this program -- and each will now upgrade each model cycle.It is a brilliant program for Apple and the User!
My teen-aged grandkids now have the latest iPhones -- and are learning about credit and financing because they are making the monthly payments.
I suspect that Apple will greatly expand this program to other products and even to emerging markets such as India.