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Detwiler's Johnston: Apple March Bar 'Set Pretty Low'

Detwiler's Johnston: Apple March Bar 'Set Pretty Low'
  • Shares of Apple Inc. (NASDAQ: AAPL) have lost more than 10 percent since the start of 2016 and are lower by 25 percent over the past year.
  • Jeff Johnston of Detwiler Fenton commented in a note on Friday that Apple's expectations for the March quarter were "set pretty low."
  • The analyst added that his smartphone checks indicate Apple's North American smartphone sales are "tracking to expectations," but this is not necessarily a bullish indicator.

According to Jeff Johnston of Detwiler Fenton, Apple's iPhone performance is tracking according to "plan," but this is "not as good as it sounds."

Johnston noted that his recent North American smartphone checks indicate Apple is on track to meet expectations in its March quarter. However, the analyst noted that Apple's expectations have been "set pretty low."

"While this sounds good on the surface, we note that North American carriers cut their March quarter forecasts in the December quarter as signs of a slowing market were starting to play out," Johnston wrote.

Related Link: How Much Does Apple Pay Matter?

Johnston is now expecting Apple's smartphone deliveries to show a quarter-over-quarter decline in the 30 percent range – a figure that is greater than prior March quarter declines. The analyst also noted his checks indicated "aggressive discounting" in the channel for the iPhone 6 as distributors were looking to limit their exposure due to "softening" iPhone demand.

Meanwhile, Samsung turned promotional in discounting excess Galaxy 6 devices ahead of the Galaxy S7 launch. The analyst also suggested that Galaxy S7 sales could be a "harbinger" for iPhone 7 sales as it is "hard to imagine the iPhone 7 having any revolutionary type feature sets."

Shares of Apple were trading higher by 0.22 percent at $93.90 Friday afternoon.

Image Credit: Public Domain

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