iphones

Fortune has its usual roundup of what the analysts are expecting Apple to report in iPhone sales next week, and the forecasts make worrying reading. The overall average is for quarterly sales of 38.2 million, which would represent year-on-year growth of just two percent.

averages

Adding to the concern, ten of the 32 analysts included in Fortune‘s poll predict a fall in sales when compared to the same quarter last year.

With the new iPhones having generated record sales in their opening weekend, and Apple having reported all-time quarterly high iPhone sales in Q1, the question is why the pessimism regarding Q2 … ? 

Bernstein’s Toni Sacconaghi told investors that the numbers are hard to predict as there are conflicting factors at play, but he cites two main reasons for picking a relatively cautious number.

First, he says, sales to China Mobile appear to have been slower than expected, and likely lower than Apple anticipated. With Apple at saturation point in developed markets like the U.S., emerging markets are now key. Second, US carriers have tightened their upgrade policies, meaning more people have to either wait longer before they are entitled to a new phone, or pay more.

Against this, however, he says that sales of the older iPhone 4 and 4s have been taking off in emerging markets, balancing out lower sales of the new models. Morgan Stanley’s Katy Huberty adds that recent carrier and retailer promotions are likely to have boosted sales, with the cheaper 8GB version of the iPhone 5c also helping in some markets – though these factors may have kicked in too late to help much with Q2 numbers.

Fortune’s full analyst roundup is below. We’re likely to hear iPad and Mac forecasts before Apple reveals the actual numbers on Wednesday 23rd April.

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12 Responses to “Wall Street predicts just two percent year-on-year growth in iPhone sales”

  1. usually less than 2% of analysts come close to predicting anything apple reports. So why (especially after 2008) are people still listening to analysts?

    • Exactly. These people are basically running the world, but who the hell put them to the reins? Whatever the situation, they’ll always find a way so that they aren’t responsible for their actions and will always end up winning on the shoulders of people who weren’t playing in the first place.

  2. rogifan says:

    Wall Street doesn’t get Apple. Never has, never will. Plus they’re in bed with Google now so that’s where all the money is going. Google announced a ‘meh’ quarter that did not meet analyst expectations but their stock will probably end the day flat, certainly not lose the almost 4% gain from yesterday. If that was Apple the stock would be down 5-6% easy,

  3. themis333 says:

    As iPhones sales also are seasonal (history has shown this over and over again) this isn’t too surprising. With news of the iPhone 6 starting to gain speed, a lot of people are going to save their upgrades and their money for the bigger and better model. I don’t think there’s reason to worry.

  4. Joel Henson says:

    A little late for April Fools wall street

  5. Brian Victor says:

    One way or the other it is nearly time for the next big thing from Apple if they want to continue being a growth company.

    • Exactly. They’ve rested long enough on laurels of inventing the modern smart phone and ‘perfecting’ it over the next iterations after… now they are in a margins game, not a technology and innovation game and it is showing. Sure they don’t focus on making the most, they focus on making the best is great marketing but it isn’t really indicative of what they are truly focussing on. They are focussing on making the most margins as possible with the highest quality within that margin but they have little regard for ‘best’ over all.

      The margins drive their decisions however contrary to what most believe; not the technology or the consumer experience… it’s the margins. If there is a choice on providing what customers want, need, or what would be a better experience OR keeping/increasing margins they will take the margins every time. This is why Tim Cook has stated that they don’t offer larger screens because of the tradeoffs and when they found a way to offer the larger screens without the tradeoffs or with little tradeoffs as possible then they will. He’s absolutely telling the truth that they don’t know how to make a larger screen without tradeoffs, but what he’s not saying is the real trade off he’s referring to is the margins; not anything having to do with quality or customer experience.

      Other manufacturers have offered larger phones for quite some time now, with great color reproduction, color accuracy, saturation, viewing angles, brightness, white point, deep blacks, all the while offering tremendous battery life. Several of these phones in fact have and are regarded as providing the best battery life in the mobile space right now even despite their large beautiful screens because guess what? A larger phone can house a larger battery… A battery which can provide longer lasting use per charge even if it is powering a larger screen; as we have learned from the iPad (which is the battery powerhouse of tablets) this is possible. The thing that makes it difficult for Apple is it would be difficult to provide the same sized screen as the competitors and keep their same margins because until now their margins have consisted of offering smaller screens for the same price or at times even higher price than competitors larger screen offerings. If they were to increase screen size and keep the same price point, their margins would would be smaller even if slightly. This is why we are now hearing reports of Apple negotiating for a price increased of $100 with carriers for the iPhone 6… Customers have wanted a larger screen from them for some time now and they will capitalize on the demand and not only compete with competitors with larger screens but also increase their margins simultaneously. A mass produced 4.7″ IPS screen and larger battery would cost on average (using existing BOM data out there) maybe $30 per unit but with the increase of $100 per unit they are negotiating for this would yield even better margins than they currently enjoy.

      Over time this same line of thinking has caused them to sacrifice customer needs or desires in other areas and has lead to declining sales which will continue to decline; not counting for ‘record sales’ experienced every launch since they do seem to have magical launch momentum. After the launch parties are over though the rest of the quarter they will continue to get beat up both at the stores and in the marketing campaigns.

      • While there may be some merit to your argument, I suspect a large part of the slower development at Apple is the difficulty of producing the vast number of screens needed. It is one thing to find a supplier for 4-5 million screens over the course of a year, and it is a far bigger challenge to find a reliable supplier for 35 million screens who can deliver those in a year.

  6. Is that really something to worry about?
    This is just indicative of the flawed way of thinking of finance, that has led us to the current economic crisis.
    There isn’t an infinite amount of people in the world, growth can’t be infinite.

  7. When was the last time one of these “analysts” correctly called Apple’s results?

  8. rettun1 says:

    GROWTH GROWTH GROWTH GROWTH

    Now that is a sustainable, efficient, and effective way of thinking. Imagine if all of our countries ran like that, like a business. Wait…