UBS: Apple iPhone sales to be flat in China this year; 2015 peak won't ever be topped

by Alan Friedman / Apr 17, 2018, 12:35 AM

UBS: Apple iPhone sales to be flat in China this year; 2015 peak won't ever be topped

UBS securities analyst Steven Milunovich said in a note to clients sent on Monday, that he expects sales of the Apple iPhone in China this year to be flat compared with last year's sales. Preventing any type of solid growth for Apple in the country is a longer upgrade cycle, saturation, and plenty of local competition. The peak year for Apple's iconic smartphone in China came in 2015 when the country made up a quarter of all iPhone shipments. Today, that figure is 19%.

The iPhone started losing momentum in China last year and Milunovich says that Chinese iPhone demand will never return to the peak level of 2015. Besides the lengthening upgrade cycle, which started just last year and will continue into 2018, the analyst says that Chinese brands have become "adept at quickly replicating features."

"We think it's doubtful China returns to its 2015 peak as local brands have caught up and upgrade cycles are lengthening. Although industry experts see aspirational buying patterns, the market as a whole has begun to slow due to saturation and lengthening upgrade cycles. Our experts agreed that upgrade cycles started to lengthen in 2017 and will continue to do so in 2018."-Steven Milunovich, analyst, UBS

Milunovich is keeping his buy recommendation on Apple despite the lack of growth forecast for the iPhone in China. His target on the stock is $190, which would be an 8% gain from today's close of $175.82.

source: CNBC

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15 Comments

1. HillaryClinton2020

Posts: 190; Member since: Feb 08, 2017

Apple doesn't need china, move all the manufacturing back to US and see how they beg us

posted on Apr 17, 2018, 12:44 AM 2

4. mootu

Posts: 1254; Member since: Mar 16, 2017

China is Apples 2nd largest market after the US. Ok, move all maufacturing back to the US, labour costs alone would push the price of an iPhone up to around $2000. Last of all where would all the components come from?. Apple makes nothing itself and all components are sourced from China and Asia. Even the Asian companys they source from manufacture in China. If Apple moved production anywhere it would be to India where labour is even cheaper than China, and Apple just love cheap slave labour.

posted on Apr 17, 2018, 1:10 AM 14

8. sgodsell

Posts: 6585; Member since: Mar 16, 2013

Apples best year was 2015 with 226 million iPhones sold. Then Apple fell by 10 million iPhones, which they sold 216 million iPhones in 2016, and then fell again to 214 million in 2017.

posted on Apr 17, 2018, 2:47 AM 1

14. Marcwand3l

Posts: 370; Member since: May 08, 2017

That would be the end of the iphone. Either Apple will have to significantly reduce their profit margins or lose their competitiveness on the market. China is a huge consumer market. Phones are cheap to make there not only because of the labor but because parts are also cheaper there.

posted on Apr 17, 2018, 5:37 AM 0

2. GreenMan

Posts: 2667; Member since: Nov 09, 2015

Well all peak at some point... And I peaked in 8th grade! I used to be one of the coolest kid in my classroom (Their words, not mine), quite famous among girls! And Apple is like me. They used to be the pioneers of smartphone industry and now look at them... 1. Apple air-pods: Flop. 2. Apple Watch: Flop. 3. Apple Home-Pod: Flop. 4. Apple iPad: Sales are dropping since the last 3 years. 5. Apple iPhone X: Was a 'moderate' success, despite all that hype. 6. Mac Books and Mac PCs: Doing reasonably well, but their overall market share in computer industry is shrinking thanks to Windows 10. Oh well, G'Day!

posted on Apr 17, 2018, 12:52 AM 9

5. AVVA1

Posts: 228; Member since: Aug 01, 2017

I dont think airpods and apple watch is a flop? Care to explain and provide facts as to why? im really curious.

posted on Apr 17, 2018, 1:44 AM 6

7. Paranoid_Android unregistered

Well, you know, 8 years in a tree's life is equivalent to a lot of years nhuman terms.

posted on Apr 17, 2018, 2:36 AM 0

11. BLUEBLASTER

Posts: 899; Member since: Feb 23, 2014

I don't think the watch was a flop. And the ipad is the only tablet worth getting. The home pod will do better when a cheaper one comes out to compete with the economy dott.

posted on Apr 17, 2018, 3:14 AM 3

15. piyath

Posts: 2443; Member since: Mar 23, 2012

Airpods are not a flop, they are a great success... Apple watch is the most popular smartwatch in the world while android wear is dead.... HomePod is too soon to call but given it's high price tag compared to $40 google and amazon competition it's doing OK... iPad is the only true tablet in the market right now, do I have to tell more.....? I don't think so... iPhone x is the MOST expensive smartphone right now and still managed to sell 15 million units in 2017 alone. Is it a flop??? Nope Macbook sales are rising, they are now the 4th largest computer in the world given their very expensive price tag... You are the loser who tells lies about a very successful company which has multiple very successful products in the lineup and publish record setting profits every quarter by selling full consumer ready products, not just components for like Samsung.

posted on Apr 17, 2018, 5:43 AM 2

16. GreenMan

Hmmm... Seems like I was wrong about the air-pod! Okay, I stand corrected! And as for The Apple Watch, it might be doing great, but only in 'smartwatch' niche, which is kinda... You know... Small! Most people don't care about smartwatches, and that includes me! So, in a sense Apple Watch is (was) a FLOP because it failed to inspire people to run to their nearest Apple Store and dump cash on a new iGadget. "One more thing": I forgot The iPod! Just like everyone else! It won't be too far from the truth if I say that The iPod is resting in peace! G'Day!

posted on Apr 17, 2018, 7:42 AM 2

3. Vokilam

Posts: 929; Member since: Mar 15, 2018

apple can turn this around, if they can just lower their prices only a little on same level as android flagship too bad apple worries only about profit margin and probably doesnt care for marketshare as long as $1000 devices sell this kinda happened in the past. apple gave sales exclusive to ATT and left a huge HUGE space for anyone ready to enter the smartphone era google took the opportunity and changed android beta eliminating the qwerty keyboard while ms and RIM (bb) were laughing android took over. i think apple is showing arrogance again leaving another big space for someone to take it without a fight i guess good thing i dont run apple, somehow real logic doesnt apply to that damn company

posted on Apr 17, 2018, 1:03 AM 0

6. notfair

Posts: 660; Member since: Jan 30, 2017

Apple and Sammy logic: Hmmm... we sell less, how can we increase the revenue? 1. Sell more? - we can't 2. Increase the price to 1200$? - bingo

posted on Apr 17, 2018, 2:29 AM 0

9. sgodsell

Samsung sells more mid and low end smartphones. As a matter of fact Samsung sold 320 million smartphones in comparison to Apples 214 million iPhones. So Samsung sold 106 million more smartphones than Apple.

posted on Apr 17, 2018, 2:52 AM 2

17. Sammy_DEVIL737

Posts: 1403; Member since: Nov 28, 2016

Who the hell are UBS? If ever anyone want some real sales and profit record than one should only trusts expert analysts like Piyath & Midan because they know how much iPhones are selling & how many Android phones are rottenning in warehouses as they actually have insight news.