Apple

Morgan Stanley Piles On Apple, Lowers iPhone Shipment Forecast

Apple doesn’t report earnings until May 1, but that hasn’t stopped Wall Street analysts from cutting their forecasts for iPhone shipments, with Morgan Stanley the most recent to pile on.

According to Bloomberg, Morgan Stanley analyst Katy Huberty cut her forecast for the number of iPhones shipped during the March-ending quarter by one million, and six million for the current quarter. She expects the Cupertino, California technology company to ship 210 million iPhones in fiscal 2018, down from her previous forecast of 217 million.

Meanwhile, in the same week, Taiwan Semiconductor Manufacturing Company (TSMC) warned that sales will come in $1 billion less than analysts had been expecting – and with Apple, the main supplier for the company, that led to renewed fears that the iPhone X isn’t doing well. The high-end device has a hefty price tag of $999, which shut a lot of buyers out of the market.

Bloomberg cited Neil Campling of Mirabaud Securities as saying that TSMC blamed the weakness on the high end of the market. “We have tracked TSMC inventory days for every quarter over the last decade and inventory days have never been higher,” Campling said in a note. Meanwhile, OTR Global said sales of the iPhone were worsening in China for the second quarter of this year, in large part because of competition from local smartphone vendors.

While Huberty cut her iPhone shipments, she did say that investors should buy the stock if it falls when fiscal second quarter results are reported on May 1, because Apple is likely to increase the amount of capital it gives back to shareholders. Thanks to President Trump’s tax reform, Apple was able to bring a lot of cash back into the country.

Meanwhile, Bank of America analyst Wamsi Mohan said in his own research report that Apple will move away from smartphone cycles and more toward services such as its App Store, iCloud, Apple Music and Apple Pay.

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