26-01-2016, 09:17 #1
[EN] Apple iPhone sales projected to be stagnant for Q1 2016
Analysts predict slowest-ever iPhone sales growth of just 1% in the first three months of its financial year, down from 46% same quarter in 2015
Alex Hern | The Guardian
Tuesday 26 January 2016
Apple is expected to report its slowest-ever iPhone sales growth on Tuesday, when it announces its earnings for the first quarter of its 2015/16 financial year.
Analyst estimates suggest that year-on-year growth in iPhone sales will come in at just over 1%. That’s a far cry from this time in 2015, when the iPhone grew 46% year-on-year.
Although the iPhones 6S boasted record weekend sales when they launched in September, their record-breaking streak hasn’t lasted, and they now look likely to sell in similar numbers as their popular predecessors – which would be a still-astronomical 74.5m units.
The reason for the slowdown in growth is unclear. Some analysts attribute the stagnant demand to the fact that the newest iPhones have fewer distinguishing features than their popular predecessors, causing some proportion of buyers to skip a generation in the hope of a more substantial upgrade with the iPhone 7, expected to arrive in September 2016.
Others point to the general slowdown in smartphone sales worldwide. Gartner figures from August show that worldwide smartphone in the second quarter of 2015 hit 329m, up from 290m the same quarter in 2014. That increase of 13.5% year on year was the slowest growth rate since 2013, Gartner reported.
The iPhones 6 also received a particular boost from being the company’s first over-sized phones, tempting some switchers from Android, particularly in Asia, who had previously lapped up phablets from players such as Samsung Electronics.
“Apple has become a victim of its own success as the blockbuster iPhone 6 product cycle was hard to replicate with many customers either buying an older, cheaper iPhone 6 or waiting for the iPhone 7,” FBR Capital Markets analyst Daniel Ives said.
China, the company’s fastest-growing market, may also have weighed on first-quarter results, as a slowdown in the country’s economy forced consumers to tighten their purse strings.
To make matters worse, Apple is expected to forecast a drop in iPhone sales for the second quarter of its 2015/16 financial year - the first time that sales will fall since the iPhone was launched in 2007.
This was foreshadowed by disappointing second-quarter forecasts from the company’s Asian suppliers such as TSMC and Largan Precision Co.
Analysts said the company will have to wait until the launch of the iPhone 7 to return to growth, as buyers upgrade to the latest version. But despite not actually existing yet, that phone is already causing controversy thanks to a rumour that the company will not include a 3.5mm headphone jack on the device, forcing customers to switch to wireless headphones or iPhone-only headphones using the proprietary lightning.
Alongside the rumours about the iPhone 7, other users are holding out for a hypothetical smaller iPhone, repurposing the 4-inch screen from the iPhones 5 with some of the faster internals from the iPhones 6. The new phone, which is said to be called the “iPhone 5se”, would fit two niches at once, serving both those users who currently buy budget devices such as the iPhone 5c, and those for whom the iPhones 6 are too large for comfortable use.
Apple shares closed down 1.98% at $99.41 on Monday. They have fallen nearly 10% since the start of October, steeper than a 2.2% decline in the S&P 500 index.
Out of the 50 brokerages that cover Apple, 43 have a “buy” or higher rating on the stock. Their median 12-month price target is $141.50. According to the Wall Street Journal, the company is currently trading at an 8.1x multiple of forward earnings, lower than almost every one of its competitors: Microsoft is at 17.0x, Google at 20.7x, and Facebook at 37.4x.
26-01-2016, 09:23 #2
Apple in 2016: Is the mighty iPhone in decline?
Dave Lee | BBC
26 January 2016
Apple's investors are spooked.
Despite a rip-roaring 2015, something peculiar happened this month: Apple's stock value dropped to below $100 for the first time since October 2014.
That was down from a high of just over $132 last May.
As I write this, it's rallying on account of some decent rumours - but it's on Tuesday we'll truly know if 2016 is going to be a tough one for the tech giant.
On the one hand, we're expecting an amazing Christmas with record-breaking revenues, yet again.
But it's Apple's guidance for what to expect in the months to come that investors will be eagerly awaiting. It's here where the company outlines its worries, the issues that keeps it awake at night (or at least, stressed out in the boardroom).
Troubled investors are expecting Apple to say this: For the first time, sales of the iPhone are in decline.
That's a big deal.
According to the latest figures Apple has shared - from October - sales of the smartphone make up 63% of the company's entire revenue. That's before you factor in all the people who then go on to buy apps, subscribe to Apple Music, and do any number of other things with their phone from which Apple takes a cut.
Its other major products don't even come close. The Mac range has bucked a huge industry-wide decline but still only accounts for 13%. The iPad, meanwhile, represents 8% - though this may get a boost thanks to the recently launched iPad Pro, the bigger version that comes with a keyboard and little stylus.
Apple's major new product of recent times has been the Apple Watch. Yet we're still none-the-wiser about how successful that has been, as its performance is lumped into the "other" category, which includes sales of the iPod, Beats headphones and various other things.
Collectively, the "other" products were worth 6% in total.
The watch will have likely been a good performer at Christmas, so Apple may begin to shed some light on how well it is doing. But we'll have to wait and see.
The reliance on the iPhone is what worries investors most. Apple has plenty of repeat business - once hooked in, data shows people are far more likely to stick with Apple than change to another brand like Samsung - but it's now seeing a plateau when it comes to bringing in new customers.
'Bet the house'
Which is why China is so important.
Apple now makes more money in China than it does in the whole of Europe, and it's well on course to overtake the US.
"If China falls so does Apple," says Apple investor Daniel Ives, from FBR Capital Markets.
"They've really bet the house on the China growth opportunity."
Almost all of Apple's gains last year were thanks to Chinese expansion - new stores, and new customers who, until fairly recently, had to make do with awful knock-off imitations of the real deal.
But instability in the Chinese economy has rocked global markets. If China continues underperforming, it may be hard for Apple to continue that growth long-term.
But for the majority of investors and analysts, China doesn't represent a problem - yet.
It's still likely to be Apple's huge growth opportunity throughout 2016.
Case in point: there's currently only 30 Apple stores across the whole of China. California has 53.
Data suggests Apple's primary target in China, the middle classes, are still emptying their pockets with glee - particularly when it comes to buying Apple products.