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 The iPhone 6S and 6S Plus, which boasted record weekend sales when
they launched in September, are now facing weak demand, according to
analysts, because they have fewer distinguishing features than their
popular predecessors.
The new iPhones also face tough comparisons with the strong sales of
their older siblings.
Apple tapped into a crucial market when it unveiled its
bigger-screen 6 and 6 Plus phones in 2014, grabbing the attention of
Asian customers, who had previously lapped up phablets from players
such as Samsung Electronics.
"Apple has become a victim of their own success as the blockbuster
iPhone 6 product cycle was hard to replicate as many customers are
either buying an older, cheaper iPhone 6 or waiting for the iPhone
7," FBR Capital Markets analyst Daniel Ives said.
China, the company's fastest-growing market, may also have weighed
on first-quarter results, as a slowdown in the country's economy
forced consumers to tighten their purse strings.
Analysts estimate Apple sold 75.5 million iPhones in the
October-December quarter, a 1.3 percent increase from a year
earlier, according to research firm FactSet StreetAccount.
This compares with a nearly 46 percent year-over-year jump in iPhone
sales in the first quarter of 2015. The slowest growth in quarterly
iPhone sales so far has been 6.8 percent, in the second quarter of
fiscal 2013, according to data from Statista.
To make matters worse, Apple is expected to forecast a drop in
iPhone sales for the March quarter – the first time that sales will
fall since the iPhone was launched in 2007.
This was foreshadowed by disappointing March-quarter forecasts from
the company's Asian suppliers such as Taiwan Semiconductor
Manufacturing Co and Largan Precision Co Ltd.
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Apple is expected to sell 54.6 million iPhones in the March 2016
quarter, according to FactSet. The company sold 61.2 million iPhones
between January and March, 2015 - a 40 percent year-over-year
increase.
Analysts said the company will have to wait until the launch of the
iPhone 7, expected later this year, to return to growth, as buyers
upgrade to the latest version.
Analysts, technology blogs and company watchers say the iPhone 7
could include waterproofing, wireless headphones and use its new
force touch technology to kill off the home button.
Apple shares closed down 1.98 percent at $99.41 on Monday. They have
fallen nearly 10 percent since the start of October, steeper than a
2.2 percent decline in the S&P 500 index.
Out of the 50 brokerages that cover Apple, 43 have a "buy" or higher
rating on the stock. Their median 12-month price target is $141.50.
(Reporting by Anya George Tharakan and Supantha Mukherjee in
Bengaluru; Editing by Sayantani Ghosh and by Savio D'Souza)
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