UBS analyst Timothy Arcuri is concerned that declining iPhone sales are going to continue not only through 2019, but also into 2020.
“We believe the challenges in China would likely to continue and while a trade settlement could help, the damage in terms of iPhone is likely done,” writes in a note to clients. Arcuri thinks that Apple likely sold around 64 million iPhones over the holiday season. While that’s still a big number, it’s less than the 68 million Wall Street consensus.
Going forward, Arcuri thinks that Apple will post around $136 million in iPhone revenue for fiscal 2019, increasing slightly to $141 million in fiscal 2020. If accurate, both of those numbers would be down from the $165 million that Apple managed in fiscal 2018 — prior to Tim Cook issuing his recent revised earnings guidance.
However, he sees the possibility of folding phones — something other companies are already exploring — as a possible way to kickstart sales again. Whether Apple would be willing to totally reimagine the iPhone in this way (which could cannibalize iPad sales in the process) remains to be seen.
Reasons to be optimistic
Timothy Arcuri isn’t the only analyst worried about future iPhone sales, of course. Plenty of others have also voiced their concerns that the days of massive growth are over for Apple’s flagship product. Others remain optimistic, though.
For instance, respected Apple analyst Ming-Chi Kuo recently argued that Apple will sell more iPhones in 2019 than many are anticipating. While Kuo doesn’t predict an amazing year for Apple in this department, he’s also not of the opinion that it will be a horrible year.
Perhaps the best reason to be optimistic about Apple right now is that its other products are booming. Although it will take a lot to make up the proportion of revenue that comes from the iPhone from other sources, things like Apple’s booming Services business are reason to be hopeful.
Source: Business Insider (paywall)