In his latest forecast, analyst Ming-Chi Kuo of TF International Securities has cautioned that Apple Inc. AAPL may face a significant drop in iPhone shipments by 2024.
What Happened: In a blog post on Tuesday, Kuo shared his prediction — a 15% year-over-year decline in iPhone shipments due to the rise in popularity of foldable phones, Huawei Technologies‘s comeback in China, and innovative phone designs that incorporate generative artificial intelligence.
According to Kuo, the Tim Cook-led company, which was the highest-ranking smartphone vendor in China last year, has decreased shipments of “key upstream semiconductor components” to roughly 200 million units.
He also stated that Apple’s weekly shipments in China have dropped by 30-40% from a year prior and expects this trend to continue.
See Also: Why iOS 18 Could Be Apple’s ‘Biggest’ Software Update In iPhone’s History: Analyst Explains
In contrast, Samsung Electronic Co, Ltd SSNLF has increased shipments of its Galaxy S24 series by 5% to 10% due to its AI-powered features, indicating a higher-than-expected demand. Apple, meanwhile, has cut its shipment forecast for the iPhone 15 in the first half of 2024.
"iPhone 15 series and new iPhone 16 series shipments will decline by 10–15% YoY in 1H24 and 2H24, respectively (compared to iPhone 14 series shipments in 1H23 and iPhone 15 series shipments in 2H23, respectively)," Kuo stated.
According to Kuo, major design changes to the iPhone are not expected until 2025 “at the earliest,” suggesting that Apple’s “shipment momentum and ecosystem growth” may falter in the meantime.
Why It Matters: Apple’s position in the global smartphone market was bolstered in 2023 when it secured the top spot in global smartphone shipments, surpassing Samsung after 13 years. This achievement came despite a general slowdown in the global smartphone industry.
However, a recent report from the Consumer Intelligence Research Partners (CIRP) revealed that consumers are increasingly choosing models with higher storage capacities despite a slump in iPhone sales. This trend, which has been positively impacting Apple’s average sales price, could potentially cushion the financial impact of the predicted decline in shipments.
Apple, which is scheduled to report first-quarter results Thursday after the market close, will likely announce earnings per share of $2.10 and revenue of $117.94 billion, according to Benzinga Pro data. This compares to the year-ago numbers of $1.88 and $117.2 billion.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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