Some weeks ago, the price of the Apple iPhone 11 series started to drop in different Chinese online store. Some of the price cuts were to the tune of 1600 yuan ($225). This is quite huge and there were speculations that Apple is either paving way for the iPhone 12 or it is currently battling with sales. A recent analysis by Goldman Sachs shows that the latter is most likely the case.
According to the Goldman Sachs report, Apple iPhone sales in the second quarter of this year may plummet by more than one third. To this end, Goldman Sachs downgraded Apple’s stock rating from “neutral” to “sell.”
Goldman Sachs analyst, Rod Hall, said in the report that iPhone sales will drop by 36% year-on-year in Q2 2020. This is as a result of the economic development arising from the coronavirus pandemic. However, he also predicts that the market demand will gradually recover, and it will decline by only 2% by Q4 2020. According to Hall, during this period, the average selling price of the iPhone will also remain weak. While lowering its stock rating, Hall also lowered Apple’s target price from $250 to $233.
Apple no longer announces the sales of its smartphones. However, there are speculations from analysts that the company will sell about 28 million iPhones in the quarter ending in June. The average expectation of analysts shows that Apple iPhone sales will decline by 27% year-on-year.
Tim Cook remains optimistic about Apple iPhone sales
However, Apple does not share the same view as analysts. According to Apple employees who attended an online meeting this Thursday, CEO Tim Cook is optimistic about the company’s outlook after the outbreak. There are reports that Apple plans to reopen its retail store in South Korea. This will be the first time it will reopen any of its 458 stores outside China since March. Apple will announce its second-quarter (as of the end of March) financial results on April 30.