Apple (NASDAQ:AAPL)
UBS analysts said on Monday that iPhone demand for Apple (NASDAQ:AAPL) “notably softened” in March.
While growth in China accelerated, analysts with a Buy rating and $180 price target on Apple stock told clients in a note that iPhone sell-through declined by almost 4% in March.
According to industry estimates, sales of Apple’s iPhone dropped about 4% year-over-year in March, falling to 17 million handsets. Sales of iPhones in the United States, Apple’s biggest market, were 4.5 million devices in March, down 8% year over year compared to February’s 6.6% increase. According to our research and previously revealed modest upgrade rates at AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile (NASDAQ:TMUS), March 2019 saw the lowest number of units sold in the United States since September 2020.
While the United States saw a decline, China saw an increase of 6.7% YoY to 3.8 million units, a 200 bps acceleration from February. The analysts said that despite a 360 basis point softer comp, Europe’s sell-through remained weak at 2.9 million units, down 22% YoY. This is a little improvement from February’s 23% fall.
1Q:23 iPhone shipments are estimated to have been at 51 million (down 13% YoY and 30% QoQ), according to the firm’s experts. UBS predicts iPhone production of 206.8 million in CY23, down 10% from the 230 million produced in calendars 2021 and 2022 “given the relatively softer sell-through trends in the U.S. and persistent softness in Europe.”
The analysts also noted that there has been no change to their iPhone forecasts but that March data indicates a risk for the second half of the year.
Despite the sell-through data, they maintained their iPhone unit and revenue estimates for the March quarter at 54.0 million and $47.9 billion, respectively (Consensus 55.6 million and $49.0 billion). Softening MoM patterns in the U.S. increase other risks for iPhone demand in Apple’s H2 (June & Sept.), even though the March qtr data is retroactive and incorporated in our tests.
On Monday’s premarket trade, Apple stock prices were down 0.3% after gaining almost 30% in 2023.
Featured Image: Unsplash @ currentspaces
