Apple took a hit late last week after Ming-Chi Kuo, the closely followed Apple analyst at TF International Securities, warned that demand for Apple’s iPhones is much lower than expected.
According to a report in CNBC citing a research report issued by the influential Wall Street analyst, Kuo expects iPhone shipments in the first quarter of 2019 to be 20 percent lower than he previously forecast with shipments of between 38 million and 42 million. Kuo has previously forecasted shipments of between 47 million and 52 million, reported CNBC. For 2018, the analyst expects shipments of 188 million to 194 million, and for that to decline by 5 percent to 10 percent in 2019 to between 188 million and 194 million shipments. That would be a lot lower than the 212 million iPhone units Wall Street is expecting Apple to ship in its fiscal year 2019, reported CNBC, citing the FactSet consensus estimate. Kuo’s report sent shares of Apple lower and is worrisome given his close relationship to a supplier. The analyst pointed to lackluster demand for the iPhone XR for the declines. “The increase in orders of legacy iPhone models cannot offset the decline of XR and XS series shipments because of the low season impact,” he wrote in the report, according to CNBC. The analyst noted that suppliers are expected to have growth challenges because of the dip in iPhone sales.
TF International Securities’ Kuo isn’t the only Wall Street watcher that is getting sour on Apple, which just a few months was a high-flying stock surpassing $1 billion in terms of market capitalization. Last week Piper Jaffray cut its estimates for Apple, pointing to demand not meeting expectations despite the fact that the new phones are being embraced by a segment of the population. Piper Jaffray cut its price target on shares of Apple to $222 from $250 but kept its overweight rating on the stock.