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Apple continues to disappoint Wall Street

by on09 July 2019


Analysts pray it can claw back money by offering “services”

Fruity cargo-cult Apple is continuing to disappoint the cocaine nose-jobs of Wall Street with its lacklustre performance, but it has convinced them that it will make a fortune selling services.

Shares of Apple fell more than two percent Monday after an analyst at Rosenblatt Securities downgraded the iPhone maker's stock to a "sell".

Three analysts now rate Apple's shares a "sell" according to data from Refinitiv. Another 18 analysts have Apple rated a "hold" — which many on Wall Street view as essentially the same thing as a sell.

The Tame Apple Press says that is “nothing” and found more than 23 analysts who think Apple is a "buy". Some of those it found might tend to buy shares in famous bridges and landmarks.

Evercore ISI analyst Amit Daryanani claimed that Apple will see a surge in services revenue in the third quarter, thanks to app store developer revenue and renewed growth in China.

With Apple focusing more on the services business, Evercore said it expects total App Store developer revenue to grow 18 percent to about $9 billion in the third quarter. Apple is due to report results on July 30.

“We think there is likely upside ahead when it comes to services revenues in the June-quarter, driven by a sizable acceleration in China-centric markets”.  Jun Zhang, the Rosenblatt analyst who downgraded Apple, paints a pretty bleak picture for Apple for the rest of the year.

"We believe new iPhone sales will be disappointing, iPad sales growth will slow in the second half of 2019 [and] other product sales growth, such as the HomePod, AirPod and iWatch, may not be meaningful to support total revenue growth", Zhang wrote.

Zhang said the iPhone XS may wind up being "one of the worst selling iPhone models in the history of Apple".

And even though service sales growth has been strong for several quarters thanks to Apple Music and Apple News, he believes that growth will start to slow.

Zhang did not cite any specific concerns about Apple sales in China. Apple's warned that China was going to be pants.

Dan Ives, an analyst at Wedbush, said in a report that he remains positive on global iPhone demand, adding that thanks to some recent price cuts in China, there seems to be a "slight uptick" in production from Apple suppliers.

He added that there haven't been any "cracks in the armor" for Apple in China, despite worries about China retaliating against US tech firms in light of the US ban on equipment from Chinese tech and telecom giant Huawei.

Ives estimates that between 60 million and 70 million Chinese consumers could be in need of upgrading to a newer iPhone over the next 12 to 18 months.

Of course, they could just buy a cheaper Chinese phone which does more. It is not as if America’s street cred in China is particularly high.

 

Last modified on 09 July 2019
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