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.