Apple Q3 likely to disappoint in wake of Brexit, slower iPhone upgrade cycles, analyst says
Apple's stock price is down over 1 percent in Tuesday trading in the wake of a Citigroup investor memo, calling for the company's sales to slide below Wall Street predictions when it announces third-quarter results on July 26.
The company is suffering not just from people choosing to upgrade their iPhones less often, but from the aftermath of June 23's "Brexit" referendum in the U.K., Citi analyst Jim Suva wrote in a memo seen by AppleInsider. The threat of the U.K. leaving the European Union has led to enough economic trouble and currency fluctuations that demand for Apple's products has supposedly dropped even further.
As of this writing, Apple shares were down to just under $94.80 in Tuesday trading, from an opening of $95.39.
Suva noted that between 2013 and 2016, typical iPhone replacement cycles have stretched from 24 months to 28, and could eventually hit 36. The analyst blamed the sitaution on a lack of high-profile features in recent models -- while the 6 and 6 Plus updated the iPhone to modern screen sizes, the 6s and 6s Plus were only modest improvements, their one significant departure being the addition of 3D Touch.
The situation could potentially be exacerbated by this fall's "iPhone 7" and "7 Plus," since reports have suggested the devices won't have many major feature upgrades, and could in fact lose the industry-standard 3.5-millimeter headphone jack. Apple is thought to be devoting work to 2017 models instead, which could feature OLED screens with integrated Touch ID and camera components.
The company is suffering not just from people choosing to upgrade their iPhones less often, but from the aftermath of June 23's "Brexit" referendum in the U.K., Citi analyst Jim Suva wrote in a memo seen by AppleInsider. The threat of the U.K. leaving the European Union has led to enough economic trouble and currency fluctuations that demand for Apple's products has supposedly dropped even further.
As of this writing, Apple shares were down to just under $94.80 in Tuesday trading, from an opening of $95.39.
Suva noted that between 2013 and 2016, typical iPhone replacement cycles have stretched from 24 months to 28, and could eventually hit 36. The analyst blamed the sitaution on a lack of high-profile features in recent models -- while the 6 and 6 Plus updated the iPhone to modern screen sizes, the 6s and 6s Plus were only modest improvements, their one significant departure being the addition of 3D Touch.
The situation could potentially be exacerbated by this fall's "iPhone 7" and "7 Plus," since reports have suggested the devices won't have many major feature upgrades, and could in fact lose the industry-standard 3.5-millimeter headphone jack. Apple is thought to be devoting work to 2017 models instead, which could feature OLED screens with integrated Touch ID and camera components.
Comments
Even if they are lower than normal...I bet their still higher profits than most other companies. You can't continue to have blowout profits quarter after quarter.
I do know one thing though.
The iPhone SE has been virtually impossible to buy in store at any Apple store. I know because I've been checking from time to time, and it's basically been out of stock since first released. They're selling faster than they can make them. Apple has not been able to keep up with demand since first released.
Seems plausible.
The only thing I can think is that UK is the country in EU where iOS has more market share, if the prices go up because of the pound being weaker against the dollar perhaps they sell less phones there
The interesting thing is that the Brexit referendum is non-binding -- the British Government could just ignore it!
My impression is that the UK is one of the better markets for its products in Europe. It always seems to be included in day one for new Apple hardware releases which does not appear to be the case with some of the other European Countries.
Apple are making around 2% less revenue on daily sales in the UK than they were two weeks ago. And they may well be selling less too as consumers are wary of spending.
So much BS there. First, it was a week ago. How much effect could it have? Secondly, the notion that anxiety and financial markets being roiled impacts demand for Apple products significantly (and worldwide) is unsupported at best.