As we head into 2024, Barclays has published a new research note with its expectations on Apple. In the report, Barclays analysts say their research shows “weakness on iPhone volumes and mix, as well as a lack of bounce-back in Macs, iPads, and wearables.”
With that in mind, Barclays is slightly lowering its price target for Apple stock from $161 per share to $160 per share.
Here are the highlights from the Barclays report:
- Expect continued iPhone weakness through the launch of the iPhone 16. Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling.
- Believe Mac and iPad need to revert further to pre-Covid levels. These two products combined were basically showing no growth pre-Covid, but are still running 20-30% above those levels despite the rest of the industry correcting.
- See growth deceleration in Services, with regulatory risk ramping. We model ~10% and ~8% growth in Services in FY24 and FY25, well below prior growth estimate of ~20%. In 2024, we should get an initial determination on the Google TAC, and some app store investigations could intensify.
- Longer term, diminishing returns on the ecosystem. AAPL remains a very strong ecosystem, moving from Mac-driven to iPhone-driven over the last decade. We believe there is less ecosystem pull-through with new products/services, which will make growth harder over the next several years.
On the iPhone in particular, Barclays says that its supply chain research shows that there have recently been “cuts, sell-through weakness, and a mix shift to base models over higher priced Pro versions.” These analysts don’t think the iPhone 16 will change things, writing that it will offer “very little feature/function difference compared to the iPhone 15.”
9to5Mac’s Take
Top comment by Daniel Dacey
Summary. Apples products have become a commodity. Price is now causing consumers to scale back the type of purchases (away from Pro models) and people are hanging on to their existing hardware longer. All seems very much common sense to me. As for Vision Pro, they didn't mention it because its sales volumes would make it irrelevant to Apples current market and most likely longer term too. I don't think the analysts see it as a game changer for Apple and I agree with that assessment. Its got a lot to prove before it gets beyond being a modern day Pippin.
Apple is doomed, clearly.
One thing I found interesting, looking at the full Barclays report: there’s not a single mention of Vision Pro. Even though Vision Pro is expected to sell fewer than 500,000 units in 2024, it’s still a product that is crucial to Apple’s business – and one that will undoubtedly impact the performance of its stock throughout the year.
What do you think of Apple’s roadmap for 2024? Let us know in the comments.
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