UBS: iPhone Sales Downturn Will Continue Until the End of 2020


iPhone-2020

At the beginning of this month, Apple CEO, Tim Cook announced big news concerning the company’s revenue outlook. He said the revenue forecast and gross margin expectations for the first fiscal quarter of 2019 are downgrading, mainly due to supply constraints and some emerging market weakness. Later the company said its problems are indeed more serious in China and extend to other markets. Also, we have heard various reports claiming the Cupertino-based manufacturer has cut production orders for all three iPhone models. Today, UBS analyst Timothy Arcuri released a report saying that Apple’s current downturn in iPhone sales may continue until 2020.

Another well-known Apple analyst Ming-Chi Kuo had previously predicted that iPhone sales in the second quarter of this year will fall by 15% year-on-year, and will remain at least unchanged in the second half of the year. In this sense, the bad news is likely to continue until next year’s models are released.

In the report, Arcuri said: ‘Apple hit a wall trying to sell iPhones in the holiday quarter last year. It may not get past that obstacle until late next year.’

The analyst believes that before the launch of a new generation of iPhone in 2020, there is little chance of a rebound in sales of Apple smartphones. He said: ‘We believe the challenges in China would likely to continue and while a trade settlement could help, the damage in terms of iPhone is likely done.’

Apple will release its first quarter of 2019 (fourth quarter of 2018) earnings after the close of the US stock market on Tuesday. UBS expects iPhone sales to reach 64 million units, down from the 68 million expected by Wall Street analysts.

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Arcuri also expects Apple’s iPhone revenue in FY 2019 to reach $136 million and will reach $141 million in FY 2020.

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