Investing.com– Apple Inc (NASDAQ: ) is likely to see weaker sales of its flagship iPhone in December, UBS analysts said in a recent note, citing lingering concerns over slowing demand and declining market share in the high-end market in China.
UBS cut its iPhone units/revenue estimate for December to 74 million units and $67.2 million in revenue from 77 million units and $69.7 million in revenue. While the brokerage sees some resilience in Apple’s services revenue, its downgraded forecast for iPhone sales saw a 2% negative revision to UBS’s December quarter revenue estimates of $120.8 billion, below Street estimates of $124 .9 billion dollars.
UBS also cut its earnings per share estimate for the December quarter to $2.25 from $2.31, compared with estimates of $2.36.
The brokerage noted recent data from Counterpoint Research that iPhone sales fell 8% from a year ago in November to 20.7 million units, with China accounting for the bulk of the decline. Global iPhone share also fell to 20.1% in November, the lowest level since November 2019.
The brokerage noted that October and November typically account for the bulk of Apple’s iPhone sales in the December quarter, with a drop in November not a bad sign for the tech giant.
“We now expect iPhone revenue to decline 5% YoY in the December quarter, missing our estimate, the VA consensus and the implied positive growth the company highlighted during its September quarter earnings report,” UBS analysts said in a note.
Apple has struggled for years with slowing device sales, with the bulk of those declines caused by weakening demand in China. The company is also facing increased competition from local players such as Huawei and Xiaomi (OTC:).
Apple’s inclusion of AI features in its flagship iPhone 16 models has done little to boost sales, given that the company has lagged far behind its competitors in introducing AI features. The tech giant is also yet to roll out AI features in China due to regulatory hurdles.
However, Apple’s services revenue remained strong, supported by strong AppStore sales and demand for its software offerings. This is expected to limit overall earnings declines.
