The iPhone 15 lineup is available with more attractive upgrades, but one research firm predicts that even these additions will not save Apple from a sales slump, particularly in the U.S., where customers are reportedly switching to the newer models at a slower pace. It also is not helping matters that Apple’s Q3 2023 earnings call witnessed the biggest decline since 2016.
One analyst says that Apple’s margins will improve at a slower pace in the years to come
Apple’s ability to continue beating expectations has been questioned by KeyBanc Capital Marks, with an investors note seen by CNBC and reported by AppleInsider, mentioning that the technology giant’s sales in the U.S. will likely struggle. Analyst Brandon Nispel states that the company will experience a fourth consecutive year-over-year decline in fiscal year 2023 but does not include the reasons why.
“We expect the U.S. to experience its fourth consecutive y/y decline in F4Q23, potentially carrying into F124 for several reasons. We also expect margins to improve at a slower pace in the next couple of years.”
While it is true that hardware sales continue to fall due to decreasing demand, Apple has been able to offset these losses by venturing into other avenues. For instance, in its Q3 2023 earnings, the Cupertino firm stated that ‘Services’ was the only category that generated more revenue in this quarter compared to the same period a year ago. As for challenges outside of the U.S., TrendForce has outlined the reasons why it will become difficult for Apple to continue selling iPhones in large shipments.
One is the resurgence of Huawei and its ability to continue making chips with the U.S. trade sanctions in place. Apple is also reportedly cutting demand for its 3nm M3 that will be found in future Macs and iPads, signifying that consumers are not upgrading as much as they used to. Overall, KeyBanc Capital Marks says that Apple’s iPhone revenue will be down 2.2 percent for the entire 2023 and will only see a 2.1 percent growth in 2024. As for the entire revenue growth in fiscal 2024, that will be 3.5 percent, whereas the average consensus from other analysts is 6 percent.
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