Since the end of the “game changing” tablet craze fizzled, the ipod died, and the iwatch was mocked, Apple has depended on recycling its iPhone to make it piles of dosh. Fortunately that had paid off, despite a shrinking smartphone market.
However it does not look like that will last – the Bank of America cut its estimate for fiscal 2016 iPhone shipments by 10 million to 220 million, pointing to a weakening among Apple’s suppliers.
Raymond James also lowered its estimate for 2016 iPhone shipments to 224 million from 229 million, also pointing to lacklustre expectations at Apple suppliers. Baird Equity Research trimmed its 2016 iPhone forecast to 234.7 million from 243.8 million.
While this might seem a lot of smartphones and arguably sold to people who do not need them, having bought a similar model a year earlier, Apple’s inflated share price depends on the market thinking it is going to continue to grow.
Sales, shares of Apple have fallen 4.4 percent over the past month and are down about 18 percent from record highs in April.
Apple supplier Imagination Technologies said softness in the overall semiconductor industry and smartphone market meant its operating profit would be lower than expected for the rest of its fiscal year.
Dialog Semi also cut its outlook, citing softer-than-expected demand for chips used in mobile phones such as the iPhone.
Reflecting increasing bets by Wall Street against Apple, short interest edged up to 1.9 percent of its outstanding shares at the end of November from 1.3 percent midway through the month, according to Nasdaq data.
Morgan Stanley said it expects iPhone unit sales to drop six percent in the 2016 calendar year as higher prices in markets outside Americas, excluding China, and maturing smartphone penetration in developed markets weigh on upgrades and new user growth.