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Will Apple Witness Its First Year-over-Year iPhone Sales Fall?

Adam Rogers

How Has Apple's Performance Been So Far in Fiscal 2016?

(Continued from Prior Part)

Apple suppliers had a very good January: Drexel Hamilton

According to Drexel Hamilton analyst Brian White, Apple (AAPL) suppliers experienced a “very good” January financially. A group of nine Apple suppliers also known as Apple Monitor saw flat sales month-over-month in January 2016. Normally, sales fall 11% month-over-month in January.

In December 2015, Morgan Stanley (MS) lowered Apple’s 2016 iPhone unit sales estimate by 12% and its EPS (earnings per share) estimate by 6%. Morgan Stanley’s report stated, “We lower FY16 iPhone units by 12% and EPS by 6% to reflect weak smart phone supply chain data points.” March 2016 estimates were lowered to 52 million units from 61 million by Morgan Stanley.

Last year, Europe’s (VGK) Credit Suisse reported that Apple had reduced its component order by 10% due to lower iPhone 6s demand. This news impacted the share movements of Apple’s suppliers such as Skyworks Solutions (SWKS) and Qorvo (QRVO), as is shown in the above chart.

Sales fall on the horizon?

Despite a good January for Apple suppliers, Apple could experience its first YoY (year-over-year) fall in iPhone sales for the quarter ending March 2016. CEO Tim Cook stated that an “unusually successful” March 2015 quarter and global economic “malaise” would lower iPhone sales.

Apple’s iPhone is the flagship product of the company. It accounts for approximately 60% of total revenues.

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