Ming-Chi Kuo Says 'Worst Soon Over' in Regards to Slowing iPhone Sales

MacRumors

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Earlier this month, Apple lowered its revenue guidance for the first quarter of the 2019 fiscal year by up to $9 billion due to fewer iPhone upgrades than it anticipated, particularly in the Greater China region.


Apple analyst Ming-Chi Kuo, however, believes the "worst" will be "soon over" in regards to the slowdown. In his latest research note with TF International Securities, obtained by MacRumors, Kuo opined that the "share prices of Apple and most iPhone suppliers are generally priced in the negative."
Our report published on December 14, 2018, was the first to cut the estimation of 2019 iPhone shipments to 190mn units or less; the current market consensus on 2019 iPhone shipments (160-180mn units) is much lower than our estimation and we believe the share prices of Apple and most iPhone suppliers are generally priced in the negative.

We maintain our forecast of 188-192mn units for 2019 iPhone shipments. We believe the downside risks of share prices for the Apple and iPhone supply chain are limited in the near term given that 2Q19 iPhone shipments will likely be better than the market consensus.
Kuo has slightly cut his estimate for iPhone shipments in the first quarter of 2019 from 38-42 million units to 36-38 million units because the "demand for new models in China and emerging markets is lower than expected," but he believes the decline will begin to ease starting in the second quarter.

Specifically, he estimates iPhone shipments in the second quarter of 2019 will reach 34-37 million units, slightly higher than the market consensus of 30-35 million units. That would still be a roughly 14 percent decline on a year-over-year basis, but far better than an estimated 29 percent drop in the first quarter.

As long as the US-China trade war does not worsen, Kuo expects the improvement to continue into the second half of 2019, with iPhone shipments likely to be generally flat compared to the second half of 2018 thanks to stronger replacement demand, trade-in programs, and market share gain in European markets.

Kuo maintains his forecast of 188-192 million iPhone shipments in 2019.

Article Link: Ming-Chi Kuo Says 'Worst Soon Over' in Regards to Slowing iPhone Sales
 

derek

macrumors member
Aug 3, 2001
67
93
Syracuse, NY
So Kuo! When is the interminable, inexplicable, inexcusable Mac Malaise going to end? When is Apple going to take AppleSeed beta-testing seriously? When is the modular Mac Pro going to show up? When will Bluetooth 5 capable gear show up? How about the multi-device wireless charger? AirPods 2? The rejuvenation of the ailing and antiquating Safari browser? Where is Apple Pencil-iPad-Mac drawing integration? Where is the transition to a 3D GUI? The return of upgradable Macs? The end of Apple's offensive dependence on China:Criminal Nation for manufacturing and sales? And so on.
 

Cosmosent

macrumors 6502a
Apr 20, 2016
922
956
La Jolla, CA
RE: "Our report published on December 14, 2018, was the first to cut the estimation of 2019 iPhone shipments to 190mn units or less;"


My "Timmy" app, with it's "Estimates" was out a Full Month ahead of you (for the Dec Qtr) !
 

Ramchi

macrumors 6502a
Dec 13, 2007
809
373
India
Ok you want to increase the stock price before earning call!! Any takers to buy it at $240 !! This can happen only if the prices have been already reduced significantly impacting it's top line through various exchange deals and other methods.
 

Baymowe335

macrumors 603
Oct 6, 2017
5,205
9,130
People don't like data, but the worst was in China. Other markets did quite well. In fact, the US, Canada, Netherlands, Korea, Italy, Germany, etc all hit records in Q12019.

Other companies have since reported weakness in China as well (Intel, Samsung). Apple was in front of this and is working on fixing the issues in China.

Apple is going to report record EPS for Q12019 and will execute in FY2019, as usual. I believe 160M iPhone sales in 2019 is totally ridiculous. They did 217M last year, so unit sales just are not going to drop that quickly. That would indicate a 26% decline in iPhone sales.

Remember, they are going to post $84B in sales in 90 days versus $88B last year, a 5% impcat. A significant drop in iPhone sales would have an even larger impact, more like the 26% above.
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Tens of millions of iPhone users around the globe won’t upgrade their phones until there’s a compact, thumb-friendly iPhone in the lineup again.
Nice speculation. How about some facts to back that up?
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As long as they still using intel chip....i wouldn’t say it is soon over.
The majority of people have no clue what kind of chip is in their iPhone.
 

vertical smile

macrumors 68040
Sep 23, 2014
3,938
5,139
No mention of unit price of iPhones......
because the "demand for new models in China and emerging markets is lower than expected," but he believes the decline will begin to ease starting in the second quarter.
So, Apple responds with falling unit sales with more expensive 2018 models and dropping the cheapest model (SE) instead of refreshing it.

And sales continue to dip, especially in emerging markets....
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IMHO, Apple needs to STOP being a Super High Premium Company and just be a High Premium Company!
Apple has always sold premium products for premium prices. They always were able to differentiate themselves from the competition, especially their SW. To use their SW, you had to pay the price for their HW....

But lately, the gap between the quality of their products versus the competitions' is closing. Now, it seems like they are Selling a sub-premium product (relative to the competition) for a super high premium price.
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Tens of millions of users isn't enough for Apple to care. Break into the hundreds of millions and Tim will take your call.
I am sure this was said in jest, but it sometimes seems like it is true.
 

magicschoolbus

macrumors 65816
May 27, 2014
1,467
5,025
Prices are to high. I have however been purchasing more Apple stuff but it’s sll last years tech. Apple Watch 3 LTE and 10.5 iPad. Just can’t afford the new stuff.... and I’ve got a pretty good Paying job. That extra 100 on nearly everything they have released has really made it much harder to purchase the latest and greatest.
 

dazlicous

macrumors 6502a
Jun 2, 2011
873
194
Manchester
Last few iterations of iPhones were already fast enough, adding 5% speed to it does not make much of a difference, no need to upgrade.
As for features, not much has been added last few years, with FaceId being an exception.
Ino that I thought the cost of my iPhone 7+ was pretty high but upgrading to a XS Max IMO the prices are outrageous
When for me only difference is the screen. I like Face ID for apps but it’s a pain for using Apple Pay compared to Touch ID
 

alpi123

macrumors 65816
Jun 18, 2014
1,017
953
I'm not quite sure that I'll update this year, given the disaster that is the AUD an iPhone with decent storage and Max screen size will cost me near $2000AUD. I'm not sure I can justify that, unless they release a game changer. But I'm doubtful of that.
Australian dollar is not the same as American dollar. People still haven't figured that out?

But besides the currency everyone else uses, iPhones are indeed highly priced.
 

mtneer

macrumors 68030
Sep 15, 2012
2,756
1,780
I can imagine Ming divining Apple upcoming production by analyzing supply chain leaks. But how will she divine how customers will behave to run up sales numbers in the future?
 
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ksec

macrumors 6502a
Dec 23, 2015
946
899
I don't believe that worst is over, especially in China where using an iPhone is now considered in some circles as traitors. That is how Huawei managed to grow its unit sales by double digit % in China while the Chinese Smartphone market shrink by nearly 20%.

Remember how iPhone got caught on in China? It was the status symbol. I am worried the damage will be long lasting.