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Apple's 'Doom and Gloom' Sentiment Reaches 'Extreme Levels,' but iPhone Sales Should Hit Bottom This Quarter

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Apr 12, 2001
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Apple analyst Brian White of Wall Street brokerage firm Drexel Hamilton has issued a research note to investors in which he estimates that Apple will reach a bottom in iPhone sales, and overall revenue and profit, in the third quarter of the 2016 fiscal year, a three-month period that ends in late June.

White claimed that all of Apple's supply chain partners that his firm tracks reported May sales that were "softer than historical averages" due to the slowdown, but he forecasted that the much-rumored iPhone 7 series will help Apple's smartphone business return to growth by the second quarter of fiscal 2017.


Until then, the bleeding isn't over. The firm estimated Apple will sell 38.5 million iPhones in the June quarter, down from 47.5 million in the year-ago quarter, followed by an estimated 41 million and 72.3 million sales in the September and December quarters respectively, both of which would also mark year-over-year declines.

White predicted that iPhone sales will then rebound to an estimated 56 million, 45.4 million, and 47.3 million in the subsequent three quarters, signaling a return to modest year-over-year growth throughout 2017. iPhone sales are estimated to reach 76.3 million by the first quarter of fiscal 2018, which would be a record breaker.

It was initially reported that Apple suppliers projected weak demand for the iPhone 7 series due to a "lack of innovation," with other market conditions to blame, but a subsequent report said Apple has asked suppliers prepare for the highest iPhone production target in "about two years."

Apple also reportedly increased iPhone SE orders last month due to strong sales, and the lower-priced 4-inch smartphone should help boost overall iPhone sales.

Mac sales are also expected to bottom out, but not until the second quarter of the 2017 fiscal year, when sales drop to an estimated 3.7 million compared to 4 million in the year-ago quarter. Mac sales are then estimated to reach 3.9 million, 4.4 million, and 4.44 million in the subsequent three quarters.

Given the current "gloom and doom" sentiment surrounding Apple reaching "extreme levels" this year, Drexel Hamilton believes the company's stock represents an "exceptional value." AAPL is currently trading in around the $98 to $100 range, while the firm has set a "buy" status with a price target of $185.

In April, Apple reported its first year-over-year decline in iPhone sales and quarterly revenue since 2003, and its third quarter guidance of between $41 billion and $43 billion in revenue, which would be up to 18 percent lower than the year-ago quarter, suggests that trend will continue through the first half of 2016.

Brian White is a longtime but somewhat infamous Apple analyst that currently serves as Global Head of Technology Hardware and Software at institutional brokerage firm Drexel Hamilton. He previously worked at investment bank Cantor Fitzgerald, where he held the same title, and Topeka Capital Markets.

Article Link: Apple's 'Doom and Gloom' Sentiment Reaches 'Extreme Levels,' but iPhone Sales Should Hit Bottom This Quarter
 

smacrumon

macrumors 68030
Jan 15, 2016
2,683
4,009
It's the price. The devices are too expensive. Price lower and go for greater volume.

And people are buying Samsung meanwhile because they have zero taste. What's new.

Looking forward to WWDC to hear what is upcoming in Apple world.
 
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2ilent8cho

macrumors 6502
Mar 9, 2016
385
1,067
Actual iPhone sales i think it will be a decent quarter for Apple. This next quarter earnings will have the iPhone SE sales in in, which still have a 3 week wait. Work colleague ordered 2.5 weeks ago a 16GB SE from apple.com and its expected this Friday. The SE has been out over 2 months and they still cannot keep up with demand.
 
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phr0z3n

macrumors member
May 15, 2011
86
262
When there is the option of two designs and the lesser design is selected, just have to wonder why. Moving humanity forward, we should be going for the best things if it's possible. It's a judgement on the choice, not the person.
I agree the iPhone has better design..

But a lot of people just don't care about design when it comes to their phone. Especially since they immediately put a case on it.

Android vs iOS is a different animal however..
 
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phr0z3n

macrumors member
May 15, 2011
86
262
You don't? Lol. I look at eyes, smile, shoes, phone, and clothes in that order. If a pretty girl has at least three of those qualities up, it's time to move to stage 2 - Personality.
Saw this girl the other day that was gorgeous. We started flirting and everything was going great. Then she pulled out her Galaxy S7 and I just walked off and laughed to myself. Man did I show her!!;)
 
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Razeus

macrumors 603
Jul 11, 2008
5,283
1,957
My mouse will be hovering my brokerage's "sell all shares" button by this time Monday. I've made some money with AAPL over the years. My mutual funds still hold them so I'll technically be exposed, but the decision to keep additional shares outside of a mutual fund will come Monday.
 
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Gooberton

macrumors 65816
Jun 20, 2010
1,273
669
Just because someone buys a Samsung device means they don't have "taste"?

Lol...
Yes I agree it means exactly that. If you look the least classy people own Samsung too, and me saying that makes me have no class so I'll go buy one too
 
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now i see it

macrumors 603
Jan 2, 2002
6,002
12,367
The firm estimated Apple will sell 38.5 million iPhones in the June quarter, down from 47.5 million in the year-ago quarter

I wouldn't think anyone (in their right mind) would be buying a new iPhone (except the SE) in June when the iPhone 7 is right around the corner. 38.5 million? Wow.
 
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