Barclays Analysts Predict Mixed Apple Results
Barclays analysts have released their expectations for Apple’s financial performance in the March and June quarters. While they anticipate that the March quarter will meet expectations, they have raised concerns about the June quarter, citing softening hardware demand as a potential reason for the company’s guidance to fall short.
Specific Projections for the March Quarter
For the March quarter, analysts predict a modest decrease in iPhone revenue, which will be partially offset by slightly higher revenues from iPad and Mac sales. They also expect Services growth to remain steady at around 11%. Specifically, they estimate iPhone sales to reach 50.5 million units, slightly below the Street estimate of 51 million. However, they believe the June quarter hardware guidance may miss Street estimates due to weakening demand, with estimates of 42 million iPhone sell-in and 39 million build versus the Street’s estimate of 44 million sell-in.
iPhone 15 Sales Decline and Outlook for iPhone 16
Recent checks indicate that iPhone 15 sales in China have continued to experience double-digit declines year-over-year in recent weeks, following a 20% drop in the first quarter. This has resulted in a shift towards the base models, leading to a negative mix shift and margin headwinds, and likely resulting in year-over-year declines in average selling prices (ASPs).
Barclays believes that management may continue to highlight the Vision Pro, but the analysts view this product as having an immaterial impact on Apple’s financial results for at least the next two years. They do not expect significant design changes for the iPhone 16, and any differentiated GenAI applications are unlikely to launch before 2025. The initial build plan for the iPhone 16 is expected to be in the low 80 million range, implying flattish unit growth year-over-year.
Analysts Maintain Underweight Rating
Based on these projections, analysts at Barclays have reiterated an Underweight rating on Apple’s stock.
