Nomura predicts poor 2019 iPhone sales, warns over 2020 5G optimism
Apple's 2019 iPhone refresh will be disappointing, according to Nomura Instinet, with financial analysts cutting their estimates to below the Wall Street consensus with the added belief other takes on the 5G-equipped 2020 models are too optimistic.
An early render of the triple camera setup of the 2019 iPhones, via OnLeaks and CashKaro
The upcoming launch of the 2019 iPhones will not improve demand for the product line, an investor note from Nomura states, due to a lack of major updates. "We see risk to December-quarter estimates," the firm warns.
It is currently believed the 2019 iPhones will largely consist of specification-bumped updates to the 2018 iPhone XS, iPhone XS Max, and iPhone XR, but with one extra camera on the back. The triple-camera setup on the OLED-based models will offer an ultra-wide lens, on top of existing wide and telephoto cameras.
As part of the lack of belief in Apple's sales, Barrons reports Nomura lowered the earnings per share prediction for the quarter from $4.59 to $4.30, putting it below a Wall Street consensus of $4.77. The company maintains its $185 target for Apple's stock price.
As for how much Apple will sell, Benzinga reveals Nomura anticipates average selling prices of $745, below Wall Street's anticipated $749 average. Unit shipments are on a par with Wall Street, with both saying 186 million iPhones will ship.
Based on reports from suppliers, it appears that Apple anticipates the sales of the 2019 models will be at roughly the same levels as 2018's collection, ordering a similar number of units from its assembly partners and component providers as previously.
Nomura's dim view of Apple's fortunes extend into 2020, in part due to the high optimism of other analysts that 5G connectivity will invigorate sales. "We believe many investors are looking ahead to the 2020 5G iPhone launches," Nomura believes, before cautioning "iPhone estimates may be optimistic and that the shape of the 5G cycle remains uncertain."
All of the 2020 models are tipped to have 5G connectivity, driven by a deal struck with Qualcomm to supply iPhone modems to Apple. The speculation of supporting the communications standard in the model and the potential for consumers to wait for that model to upgrade has led to some analysts to raise their stock targets, including in one case up to $250.
An early render of the triple camera setup of the 2019 iPhones, via OnLeaks and CashKaro
The upcoming launch of the 2019 iPhones will not improve demand for the product line, an investor note from Nomura states, due to a lack of major updates. "We see risk to December-quarter estimates," the firm warns.
It is currently believed the 2019 iPhones will largely consist of specification-bumped updates to the 2018 iPhone XS, iPhone XS Max, and iPhone XR, but with one extra camera on the back. The triple-camera setup on the OLED-based models will offer an ultra-wide lens, on top of existing wide and telephoto cameras.
As part of the lack of belief in Apple's sales, Barrons reports Nomura lowered the earnings per share prediction for the quarter from $4.59 to $4.30, putting it below a Wall Street consensus of $4.77. The company maintains its $185 target for Apple's stock price.
As for how much Apple will sell, Benzinga reveals Nomura anticipates average selling prices of $745, below Wall Street's anticipated $749 average. Unit shipments are on a par with Wall Street, with both saying 186 million iPhones will ship.
Based on reports from suppliers, it appears that Apple anticipates the sales of the 2019 models will be at roughly the same levels as 2018's collection, ordering a similar number of units from its assembly partners and component providers as previously.
Nomura's dim view of Apple's fortunes extend into 2020, in part due to the high optimism of other analysts that 5G connectivity will invigorate sales. "We believe many investors are looking ahead to the 2020 5G iPhone launches," Nomura believes, before cautioning "iPhone estimates may be optimistic and that the shape of the 5G cycle remains uncertain."
All of the 2020 models are tipped to have 5G connectivity, driven by a deal struck with Qualcomm to supply iPhone modems to Apple. The speculation of supporting the communications standard in the model and the potential for consumers to wait for that model to upgrade has led to some analysts to raise their stock targets, including in one case up to $250.
Comments
The last four years haven't really moved the needle on shipments. That in itself is telling.
Let's go further....telling, how?
As much as I think this analysis may be off, I do think the 2019 iPhone is going to be underwhelming. I have an XS Max, and I just doubt I'm going to turn it in to upgrade. I think I'd rather pay it off over another year.
Your conclusion is spot on. I personally will not be upgrading now, but...a huge number will...and sales will be fine.
Coming from the guy who thinks knockoffs are "innovative" and Apples innovations are "catching up", LOL
Of course Apples shipments are down. They don't ship junk! iKnockoff users replace their junk every 6 months to 2 years on average, Heck I know someone who buys a new knockoff iPhone every 2 months!! (Android sales are skyrocketing!) A little common sense and listening to Apples RECORD-BREAKING quarter(while half asleep) is enough to tell you WHY those shipments are down. (Hint: Apples user bases are at all time highs.)
Let's see when android "catches up" to privacy and security. For now they're all on one great ship built by Apple and supporting each other. It's funny how ONE company can destroy an entire army of iWannabes single-handedly to the point everyone predicts Apples "doom" out of pure envy.
Been hearing this iPhone doom since 2007. The next iPhone is always "gonna have a hard time", when analysts are incorrect the narrative changes to "just wait until next year!"
"Apple is doomed because peak iPhone!!"
*Apple Watch releases*
"No one wants this!"
*Apple Watch becomes #1 watch in history*
*Apples doom delayed*
"Apples doomed because peak iPhone and peak Watch!!"
*Airpods release*
"No one wants this!"
*Airpods create a category*
*Apples doom delayed*
"Apple is doomed because 5G!!"
With AppleCard, TV+, Arcade and more to come we're gonna have to delay Apples "doom" just a bit longer.....
A lot of these features are the features that sell the phones.
I'd say the battery charging experience (out of the box) is the easiest problem to fix and the one that frustrates most users. Capacities are creeping up and rumours point to an improvement in that area. Camera versatility is probably the biggest tentpole feature that is currently missing (and desired by users).
True dual SIM finally arrived but only on Chinese models. A step in the right direction IMO. Tracking in difficult situations (many tunnels, high speed rail networks) is a weak spot.
The 5G thing seems more hype than anything for mobile users. The current 4G LTE service is quite good even out in the sticks after a couple of years of fine tuning.
When anywhere but the car or out walking/hiking I hardly use the phone. The iPad Pro goes along (like now at lunch) and my desktop Mac and 32” UHD display is the go-to at home. There is no need for a more powerful iPhone.
For the people happy with their phone, they’re going to wait for 5G. I would expect a hit to holiday sales though...
By the way, I’m now convinced we’re going to see a fire sale on 15” MacBook Pro’s after the 16” starts selling. I think the move to 16” isn’t as much about technology but about what’s happening with airlines banning 15” MacBook Pros.
I also think both business and individuals that travel are going upgrade to 16”. There’s probably going to be a flood of “preowned” machines becoming available and attractive prices.
But their products still sell as fast as Apple can make them. And in the end the people putting down their own real money are the only ones who count.
Apple has absolute knowledge of exactly how many users are holding onto what and for how long but never makes any reference to a potential wave of upgrades. For example, it knows how many active iPhone 6 units are still in active use. If the famous supercycle actually happened or not, it is known by the company. It could be that there was a massive upgrade to the 2017 phones but not enough to stand out in an otherwise stagnant market, a lot of users are still holding out or simply the upgrade was a slow move over a few years.
Last year China played a big part in the profit warning. Market conditions in China for Apple's blowout quarter are still a mystery today and will depend on Trump's Christmas spirit. If he manages to stir things up from now until January, Apple can expect another rough ride. If he changes tack and things calm down, Apple might see an improvement.