As most of you know, Tim Cook announced an earnings guidance revision, where the CEO reported that Apple might report up to $9 billion less in revenue thanks to slowing iPhone sales. However, while the smartphone market has become tremendously saturated, a renowned analyst states that the worst will soon be over in regards to the iPhone slowdown. In the latest research note, the analyst provides more insight on the matter.
Ming-Chi Kuo States That the Current 2019 iPhone Shipments Estimation Is Much Lower Than the Numbers Detailed in This Research Note
The research note details that the share prices of Apple and most iPhone suppliers are priced in the negative. Shipments estimates according to different sources say that Apple is estimated to ship between 160-180 million iPhone units for this year. However, Ming-Chi Kuo states that his estimations stand at 188-192 million units, while also saying that the decline of iPhone sales will start to ease starting in the second quarter of this year.
Earlier, Ming-Chi Kuo cut his estimates for iPhone shipments for the first quarter of 2019 from 38-42 million units to 36-38 million units. His reasoning for the lowered estimates are due to the new models not gaining significant traction in China and other emerging markets. The market consensus of iPhone shipments for the second quarter of this year stands between 30-35 million units, while the analyst’s estimates stand at 34-37 million iPhone units.
Apple claims that one of the reasons for this slowdown was that people hung onto their iPhones longer thanks to the $29 battery replacement that saw the technology giant replace around 11 million batteries. The figure is much higher compared to approximately 1-2 million batteries that Apple normally replaces. With the battery replacement program, owners kept holding onto models as old as the iPhone 6 and iPhone 6s as they were experiencing the same performance as when they first unboxed the smartphone from its packaging.
Thanks to this iPhone slowdown, Apple has also slowed down its hiring spree for certain product divisions, while also restocking the iPhone SE for a $249 starting price at its Clearance Store to prop up sales as much as possible. Apple will be focusing more on its services division to generate higher revenue, and with the company’s upcoming financial report, we’ll get to know more about how the California-based giant stands.
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