Market Overview

Another Apple Analyst Warns Of Soft iPhone, Overall Smartphone Demand

Another Apple Analyst Warns Of Soft iPhone, Overall Smartphone Demand
Related AAPL
Consumer Discretionary Q4 Earnings: U.S. Consumer Appears Strong Amid Heightened Global Uncertainty
Apple Bull Weighs Impact Of Taiwan Semiconductor Guidance Cut, Battery Replacement
Digital giants in crosshairs of EU tax (Seeking Alpha)

Canaccord Genuity's surveys are pointing to soft smartphone demand, including for tech giant Apple Inc. (NASDAQ: AAPL)'s iPhone. 

The Analyst

Analyst T. Michael Walkley reiterated a Buy rating on Apple and lowered the price target from $250 to $225.

The Thesis

Canaccord's recent surveys took unit sales across a broad range of products into consideration. Apple has maintained a strong share of smartphone sales at four major carriers, Walkley said in a Wednesday note. (See his track record here.) 

“Despite slowing iPhone sales, we still anticipate Apple will continue to grow its install base and believe the ecosystem will contribute to strong ongoing growth, particularly for higher-margin Services and other products.”

Apple’s iPhone installed base should exceed 700 million in 2018 on the basis of its ability to expand market share, the analyst said. Overall, recent surveys indicate soft demand for the iPhone XR, despite the high expectations surrounding the reduced price, he said. 

“Feedback for lackluster initial sales included its inferior quality perception given its aluminum construction versus the XS and XS Max, lack of HD screen and viable lower-cost alternatives in the older iPhone X and 8 models," Walkley said. "T-Mobile Us Inc (NASDAQ: TMUS) appeared to have stronger XR sales trends than the other three carriers.”

Canaccord anticipates that strong long-term ecosystem growth will drive Apple's revenue streams.

Cupertino will likely sustain strong Services revenue growth aided by the App Store, subscriber growth, Apple Care and Apple Pay, Walkley said. 

“In addition, we believe Apple is developing additional services such as video content that could lead to new areas of growth. Further, our survey work indicates strong performance of wearables continuing the strong momentum coming out of Q4 earnings, and we increase our growth rates from mid-single-digits to double-digits for the Other Products segment.”

Price Action

Apple shares were down 1.23 percent at $178.71 at the time of publication Thursday. 

Related Links:

Microsoft's Valuation Catches Up To Apple — How Did It Happen?

Qualcomm Is Close To Resolving Yearlong Apple Dispute, CEO Tells Cramer

Photo courtesy of Apple. 

Latest Ratings for AAPL

Jan 2019CitigroupMaintainsBuyBuy
Jan 2019NomuraMaintainsNeutralNeutral
Jan 2019Canaccord GenuityMaintainsBuyBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Canaccord Genuity iPhone revenue SalesAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga


Related Articles (AAPL + TMUS)

View Comments and Join the Discussion!

Latest Ratings

CNPRBC CapitalUpgrades34.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

The 6 Biggest Economic Events To Watch In December

Morgan Stanley Sees Choppier Waters Ahead For Micron, Says To 'Use Strength As A Selling Opportunity'