'Worst of the bad news' is behind Apple when it comes to iPhone sales
Though Apple's March-quarter iPhone shipments will likely be disappointing, there are signs that a recovery is underway, according to an analyst report issued on Wednesday.
"While March mix is still bad, the tone in the supply chain is staring to improve and price reductions in China may be starting to clear channel inventory," Timothy Arcuri from IBS said in a memo seen by AppleInsider. Procurement estimates for the iPhone XR are claimed to be up quarter-over-quarter in June, something unusual for an iPhone at this stage in its product cycle.
UBS is boosting its June-quarter iPhone estimates from 32.5 million units to 34.5 million, though mostly on the basis that Apple is expected to sell more pre-2018 models. While UBS is predicting 3 million more iPhone XR sales, it's expecting an equal decrease in iPhone XS and iPhone XS Max shipments. That should also push iPhone ASP (average selling price) down, UBS's revised estimate for the June quarter being $655 instead of $683. Forecast revenue is nevertheless being increased from $50 billion to $50.4 billion.
For the March quarter, UBS is leaving its iPhone shipment predictions unchanged at 40 million, but arguing that 5 million more of those will be pre-2018 models, offsetting reductions of 2 million for the iPhone XR, 1.5 million for the iPhone XS, and another 2 million for the iPhone XS Max. Average selling price for the iPhone has been shifted down from $711 to $687, and Apple's overall revenue from $57.5 billion to $56.5 billion, with iPhone revenues down from $30.2 billion to $29.2 billion.
UBS is leaving its calendar 2019 and 2020 revenue estimates unchanged at $259 billion and $258.7 billion, respectively. Likewise it's holding onto a "buy" rating for Apple stock with a $185 price target.
Apple suffered a precipitous 15 percent decline in iPhone sales during the December quarter. The company has blamed this primarily on weak sales in China, but also "foreign exchange headwinds," "economic weakness in some emerging markets," and even its discounted battery replacement program, which generated about 11 times more traffic than anticipated.
"While March mix is still bad, the tone in the supply chain is staring to improve and price reductions in China may be starting to clear channel inventory," Timothy Arcuri from IBS said in a memo seen by AppleInsider. Procurement estimates for the iPhone XR are claimed to be up quarter-over-quarter in June, something unusual for an iPhone at this stage in its product cycle.
UBS is boosting its June-quarter iPhone estimates from 32.5 million units to 34.5 million, though mostly on the basis that Apple is expected to sell more pre-2018 models. While UBS is predicting 3 million more iPhone XR sales, it's expecting an equal decrease in iPhone XS and iPhone XS Max shipments. That should also push iPhone ASP (average selling price) down, UBS's revised estimate for the June quarter being $655 instead of $683. Forecast revenue is nevertheless being increased from $50 billion to $50.4 billion.
For the March quarter, UBS is leaving its iPhone shipment predictions unchanged at 40 million, but arguing that 5 million more of those will be pre-2018 models, offsetting reductions of 2 million for the iPhone XR, 1.5 million for the iPhone XS, and another 2 million for the iPhone XS Max. Average selling price for the iPhone has been shifted down from $711 to $687, and Apple's overall revenue from $57.5 billion to $56.5 billion, with iPhone revenues down from $30.2 billion to $29.2 billion.
UBS is leaving its calendar 2019 and 2020 revenue estimates unchanged at $259 billion and $258.7 billion, respectively. Likewise it's holding onto a "buy" rating for Apple stock with a $185 price target.
Apple suffered a precipitous 15 percent decline in iPhone sales during the December quarter. The company has blamed this primarily on weak sales in China, but also "foreign exchange headwinds," "economic weakness in some emerging markets," and even its discounted battery replacement program, which generated about 11 times more traffic than anticipated.
Comments
That being said, I agree with your implication that subscriptions will make up a much more significant percentage of Apple's future revenue.
Except no one cares about knockoff iPhones.
2nd biggest quarter ever.
Not all Android [manufacturers] faced bad news.
If you know, please provide a cite or a link to the numbers.
I believe consolidated accounts for 2018 will be released soon. What we know at present is that $52B of the company's annual revenue for 2018 came from the consumer business group. Over 200,000,000 handsets were shipped and more than 100,000,000 non-handset devices were sold. Huawei has attributed the strong handset sales to its mid to high end phones. Consolidated results for 2018 will be declared in the company's annual report.
For 2017 you can read the annual report here:
https://www.huawei.com/en/press-events/annual-report
Net profit was in the region of $7.5B
With the market for high-end smartphones becoming saturated, and upgrades cycles lengthening, higher-priced phones enable them to continue growing revenue. Apple saw this coming 5+ years ago.
But let’s look at Apple Music. I pay $10/month, so $120/year. I’m 56, so let’s say I continue for 30 years. That’s $3600, most of which will be paid in future [cheaper] dollars, but let’s say the subscription cost rises to match any future decline in the value of dollars. So it’s $3600 in today’s dollars for simplicity. For that money I could have purchased about 2500-3600 tracks, assuming I want to stay within the bounds of the law and reward the industry and artists for their talents and contributions. And as new music comes a,one I get none of it; stuck with my 3600 tracks for life, unless i want to pay more.
On the the other hand, with an Apple Music subscription for those 30 years I get millions of tracks, any number of which I can download for offline listening, and I get new music as it comes out. What’s not to love about that deal? Please, any downside?
I know more than a few people who had 6000, 10,000, and more tracks in their iTines collections. To be legal they would have had to spend a great deal more than a 30-year subscription to Apple Music or Spotify. And be stuck paying even more to maintain as new music is released.
Like I said, come back when you have facts.
YMMV, but you asked for downsides, and those are just what I came up with off the top of my head.