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iPhone sales this quarter may see a sharp decline

Apple shares dropped by more than 4% today amid word that iPhone sales for the current June quarter may check in significantly lower than anticipated. In a new research note from Katy Huberty (via CNBC), the Morgan Stanley analyst relays that the investment firm lowered its iPhone sales estimate for the quarter from 40.5 million units down to 34 million units.

“We expect Apple to report an in-line March quarter, but are cautious into earnings on May 1 due to our belief that June quarter consensus estimates need to be revised lower,” the note reads in part.

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As a point of interest, Apple sold 41 million iPhones during the June 2017 quarter, which is to say Apple may see a significant drop-off in iPhone sales if Huberty’s projection is anywhere close to being accurate.

As to the reasons why Huberty believes Apple is losing some iPhone sales momentum, unit sales in China remain an ongoing concern:

Huberty cited her poor checks with Apple’s iPhone suppliers and weaker-than-expected data from China for her estimate reduction. She noted Apple’s smartphone activation share fell in China so far this year through March.

On a related note, iPhone sales expectations already took a hit this week amid a disappointing growth forecast from Apple supplier TSMC, a financial outlook many are attributing to weaker than expected iPhone sales.

All told, there’s mounting evidence that the iPhone X, to the surprise of many, simply didn’t spur an avalanche of upgrades. Part of the problem, according to some recent research reports and surveys, is that many consumers simply found the iPhone X’s $999 sticker price to be far too high, all the more so given that we no longer live in a world where carriers offer significant subsidies for flagship devices.

Beyond the June quarter, iPhone sales may eventually see a huge upswing once Apple releases its 2018 lineup. Not only will Apple reportedly release a premium 6.5-inch iPhone X Pro along with a refreshed iPhone X, rumor has it that Apple later this year will introduce a 6.1-inch iPhone with an edgeless LCD display. Moreover, the LCD model will reportedly be aggressively priced, with many analysts anticipating it to fall somewhere in the $700 range. Most recently, analyst Ming-Chi Kuo issued a research note claiming that the LCD model may cost as little as $550.

Incidentally, Apple will post its earnings report for the recent March quarter on May 1.

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See the original version of this article on BGR.com

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