Kuo: Rocky road ahead for iPhone, but leveling off in second half of 2019

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in iPhone
iPhone sales will continue to be weak in the first half of 2019, but should at least flatten out in the second half and help beat Wall Street consensus, TF Industries analyst Ming-Chi Kuo said in a memo seen by AppleInsider.

iPhone XS Max


March-quarter iPhone sales are likely to drop 29 percent year-over-year to 36-38 million, Kuo wrote, flagging that while Apple's trade-in programs have fueled demand outside of China, interest in new models within China and "emerging" markets markets has been lower than expected. In the June quarter, a 15 percent decline to 34-37 million units is anticipated.

For the year as a whole Kuo is sticking to an estimate of 188 million to 192 million units, significantly above the consensus view of 180 million. The analyst expects this fall's iPhone models to keep 2H19 units flat against 2018, thanks to trade-in programs, healthy replacement demand, and growing European marketshare.

Towards the beginning of January Apple took the unusual step of downgrading its December-quarter guidance from $89-93 billion to just $84 billion. CEO Tim Cook placed most of the blame squarely on iPhone sales, saying it that it accounted for "all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline."

He specifically cited the Chinese iPhone market, but also factors like "foreign exchange headwinds," fewer carrier subsidies, and "economic weakness in some emerging markets." Controversially he pointed to people taking advantage of a temporary discount on battery upgrades, instituted to apologize for throttling iPhone performance without consent. The company saw at least 11 times more upgrades than it had planned for.

Final December-quarter results will be revealed at the close of Apple stock trading on Tuesday, Jan. 29.

Comments

  • Reply 1 of 10
    There is one clear way to handle this problem: Release a new iPhone worth the price, and the killing of the SE was one foot in the door, as there will be no SE 2 or whatever coming in March, so they won't have sales growth again until September or later, and that depends on if the iPhone XI and XIR are a substantial upgrade.
    burnside
  • Reply 2 of 10
    I'll stick to my SE as long as it will work or until new 4" iPhone is released. New battery should last at least another 2 years. ;)
    edited January 27 burnside
  • Reply 3 of 10
     Controversially he pointed to people taking advantage of a temporary discount on battery upgrades, instituted to apologize for throttling iPhone performance without consent. The company saw at least 11 times more upgrades than it had planned for.

    Please explain to me which part of putting in the notes of the update and the customer agreeing to install it constitutes without consent?  Apple is the only company that even supports devices that long. In fact I’m sure they  would have been raked over the coals to have a solution to extend the life of these devices by recognizing when conditions for spiking occurs like they did, but remained quiet and did nothing. This actually decreases potential sales for them because they know old batteries in all phones spike and eventually damage other components.   It would have been in their best interest to do nothing like the others and just cut support for them. Especially now that they see the media will make it whatever they want and drag it forever. The battery program was to silence a false narrative, but obviously it still continues. Unfortunately for real Apple fans and customers, they may stop trying to find ways to extend the life of our phones because of this. 
    tmaycurtis hannahnetmage
  • Reply 4 of 10
    JFC_PAJFC_PA Posts: 295member
    My iPhone XS Max is well worth the price. As has been every iPhone model I’ve chosen to purchase since the 3. 

    Great performers solidly built. 

    Lithium battery chemistry is what it is:  “should” doesn’t change that. My observed declines with daily topping up have been minimal: whether that’s related to avoiding overheating I couldn’t say. But I suspect as heat does age Lithium batteries (chemistry again) it very well may  be my patience is rewarded. 

    Looking forward to to their next offerings for my choices. 
    applesnoranges
  • Reply 5 of 10
    wood1208wood1208 Posts: 1,867member
    May be Mr. Kuo should be fortune teller.
  • Reply 6 of 10
    Kuo has no credibility with his predictions. He should stick to what he knows best, which is supply chain scuttlebutt that isn’t always right anyway.
  • Reply 7 of 10
    wood1208 said:
    May be Mr. Kuo should be fortune teller

    Same could 
    be said for every business writer and financial analyst. The trick is to gather all this information, analyze it and look for patterns. Certainly you cannot make financial decisions based on one reporter. Picking stocks is an art, the more information you have the better your chances to make a profit. 
  • Reply 8 of 10
    croprcropr Posts: 914member
    A lot will depend on 5G.  If in 6 months it becomes clear that 5G will be rolled out in a lot of countries by year end 2019 or beginning 2020 and Apple can only supply a 5G iPhone in September 2020, the Christmas sales of the iPhone might not be picking up the usual steam.  If there are no big 5G roll outs Apple will have less an issue
    muthuk_vanalingam
  • Reply 9 of 10
    burnsideburnside Posts: 10unconfirmed, member

    SE2

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