Apple's stock may end up in the red, as analysts issue warnings on 2016 iPhone sales

Apple's stock may end up in the red, as analysts issue warnings on 2016 iPhone sales
When the Fed raised the interest rates yesterday, the expected dip in stocks didn't happen, as the pundits explained how Janet Yellen's announcement has already been baked into the pricing. In fact, the Nasdaq ended significantly up, lifting most tech stocks with a similar amount. Most, but not every institutional investor's darling - Apple - whose stock rose less than a percent with the broader market, and has lost 18% since its record highs in April, with the last week alone witnessing it slide 4.4%.

One of the reasons for Apple's ho-hum performance lately are a few analyst reports that came out and underscored the weakness in Apple's revenue potential for the fiscal year ahead. On Wednesday, Bank of America adjusted its iPhone shipments forecast for 2016 from 230 million to 220 million. The financial advisers from Raymond James also cut their unit sales expectations for the iPhone, but with 5 million units only - from 229 million to 224 million. Earlier in the week, it was Baird Equity Research's turn to revise its predictions down to 234.7 million as well, mounting more pressure on Apple's share price. All analyst memos cited weakness in Apple's supplier earnings forecasts as the reason for their iPhone shipment adjustments for 2016.

While it's not easy to judge orders by reduced supplier numbers, as those companies work with names other than Apple, usually the team from Cupertino is one of their biggest clients. Thus, when Imagination Technologies, whose graphics processing chips are used in Apple's custom SoCs, lowered its operating profit forecast for the year ahead, one ought to think why. Yet another Apple supplier, Dialog Semi, added fuel to that fire by cutting its revenue and profit estimates for 2016, and all those profit warnings and shipment forecast cuts have apparently spooked investors a bit, to the point that Apple might now close in the red for 2015. We wouldn't worry too much about a company with $200+ billion in cash, though.

Apple's stock may end up in the red, as analysts issue warnings on 2016 iPhone sales

source: Reuters

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19 Comments

1. HugoBarraCyanogenmod

Posts: 1408; Member since: Jul 06, 2014

Thank you federal reserves, looking forward to the endless suffer each of the American company. Apple, GM, Amazon, ExxonMobil and the rest of oil companies, as well as Walmart

6. TerryTerius unregistered

The only reason we had basically non-existent interest rates for years was because the global economy crashed in 08. At some point they inevitably had to go up like they are during normal economic activity. Apple's stock price going down had literally nothing to do with this move. And since none of those companies you mentioned are helmed by particularly stupid people, I'm pretty damn sure they knew that our monetary policies would normalize after the recession was (mostly) over, and accounted for that. They all knew this was coming. I get you are basically trolling, but at least have some idea of what you're talking about. If you're trying to be anti American, don't be cartoonish about it. It's just hilarious as opposed to insulting. And the word is suffering*

12. shiftt

Posts: 333; Member since: May 03, 2015

Terry is basically saying our economy is going to collapse again.

18. DnB925Art

Posts: 1165; Member since: May 23, 2013

The economy experiences cycles. History has shown this. It will do it again sometime in the future.

2. Raito

Posts: 77; Member since: Aug 15, 2014

#grabpopcorn

3. ysk79

Posts: 39; Member since: Jan 06, 2014

getting heavily paid to always predict wrong is one of my favorite jobs. i dont know why would I need to study so much for it. I can do it right now.

4. twens

Posts: 1154; Member since: Feb 25, 2012

Not surprised at all. The 6,6plus and 6s, 6s plus are all capable phones that can last anyone 2-3yrs. I don't see much people buying the new iPhone simple because the old still has a lot to offer. Samsung will also face similar issues, I tested the note 5 and boy, that phone is well made and a beast. It can easily be used for nearly 5 years. The smartphone industry as a whole is about to face decline in profits.

7. TerryTerius unregistered

Yep, pretty much this. Phones across the entire price gamut from various companies are good enough to last you for quite some time now, and the technology is slowly plateauing. More importantly, the market is maturing and there are fewer new customers with the extra capital for a high end phone. There are many other reasons for slowing growth and I'm over simplifying it a bit, but those are two of the main culprits. Add on to that the fact that most new smartphone buyers are going to be from developing countries in the not too distant future, where the citizenry generally doesn't have large sums of disposable income... And it'll be even more difficult for companies to maintain their profit margins. It'll be interesting to see what happens over the next few years, but I don't necessarily see the higher end of mobile going away. It's unlikely the smartphone is in its final permutation, there are lots of innovations to be made with mobile in general (not to mention wearables, VR and whatever else comes next), and all of these companies have a vested interest in pushing the envelope. We'll see how it all shakes out I guess.

8. promise7

Posts: 894; Member since: Jul 03, 2013

Most Android flagships can last 4-5 years, the problem is they don't get OS updates after 2 or so years even though they have good specs.

15. Wiencon

Posts: 2278; Member since: Aug 06, 2014

But it doesn't break your phone in any way does it?

19. DnB925Art

Posts: 1165; Member since: May 23, 2013

Exactly. My Note 2 no longer really gets any updates (except a surprise security update a month or 2 ago), but it can still run just about any app installed on it, make phone calls, text, and surf the web.

17. TBomb

Posts: 1029; Member since: Dec 28, 2012

The problem is.. Apple depends A LOT on their smartphone business. Samsung and others don't necessarily have to.... ie Samsung makes everything. LG makes a whole slew of items. You don't see Apple branded dishwashers or TVs. all you see is Phones and Computers with the fruit on it.

5. GreenMan

Posts: 2687; Member since: Nov 09, 2015

As much as I hate Apple's 'PAY ME BIG BUCKS' policy; I don't 'foresee' Apple going down the darin pipe ala Nokia anytime soon, if ever... Apple's iPhone aren't just Smartphones. They also happen to be a fashion accessory, a status symbol and a nice effective tool for 'bragging rights'. News casters can only predict the weather, happens only what The God wants...! G'Day to you all.

9. TerryTerius unregistered

While that's true to a certain extent, that wouldn't really be the reason why they last. Nokia fell because it failed to react to changing trends and technology in time. With Apple's enormous war chest and general willingness to try new things I don't necessarily see them suffering the same fate anytime soon. Then again, they also don't have Steve Jobs anymore. And while much Tim Cook has enormously grown Apple's profits, I'm not at all convinced he is the visionary Steve was.

11. Well-Manicured-Man

Posts: 648; Member since: Jun 16, 2015

Tim Cook certainly isn't a visionary like Steve Jobs was. He is data driven while Steve was driven by emotions. The important question to answer is: What does Apple need right now? I think that it is Cook because right now, the companies need to improve and compete in an existing market. Apple will miss Steve the most when it would be time to create the next market in 10 years or so. This, Cook cannot do.

14. GreenMan

Posts: 2687; Member since: Nov 09, 2015

@Well-Manicured-Man I'm totally agree... It was Steve Jobs who 'kick-started' the smartphone craze... A cellphone with a big display and gesture based interaction without any need of physical buttons... He thought about it in the early 90's according to an article I read years ago! Talk about 'ahead of the curve'!!! And regardless of the fortune he left or the policy of the company he made, That guy is a true legend... A moment of silence, please...

10. byazatt

Posts: 316; Member since: Oct 26, 2012

Plus cool gets redefined with time, who knows what the next big thing will be.

13. shiftt

Posts: 333; Member since: May 03, 2015

World economic collapse anyone?

16. jesus_sheep

Posts: 279; Member since: Apr 18, 2015

what are all these people talking about?

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