After two big quarters for Apple (AAPL) iPhone 12 sales, analysts are forecasting a slowdown ahead. That’s one reason Apple stock is down since the company’s stellar March-quarter results.
Apple signaled a slowdown for the June quarter when it announced fiscal second-quarter results on April 28. It expects a more dramatic seasonal sales decline from the March quarter to the June quarter than in prior years. That’s because iPhone sales were higher than usual in the March quarter because of the late launch of the iPhone 12 series last year, Apple said.
And Wall Street isn’t counting on a sales lift from the upcoming iPhone 13 series, due out this September. News leaks point to minor changes with the 15th-generation iPhones.
The fall 2021 iPhones are so-called “S” cycle phones, which occur every other year following major iPhone design changes. The iPhone 12 series was a major upgrade, with handsets supporting 5G wireless networks for the first time.
Next Two iPhone Cycles ‘Challenging’
Barclays analyst Tim Long said the next two generations of iPhone are likely to see sluggish sales.
“We believe the next two cycles may prove challenging with units down year over year in fiscal 2022 and 2023,” he said in a note to clients Wednesday. “The spending pattern has been pretty consistent over the last decade, with one strong iPhone revenue year followed by two weak ones.”
He expects only “modest” product changes with iPhone 13 and 14.
“The next big iPhone cycle might be iPhone 15 in our view. This could time well with speculation that a foldable iPhone 15 may arrive in late 2023,” Long said.
Long rates Apple stock as equal weight with a price target of 138.
Apple Stock Called ‘Dead Money’
Evercore ISI analyst Amit Daryanani said he also thinks a foldable iPhone will be the next major upgrade. Apple could use the new form factor to increase iPhone average selling prices, he said in a recent note to clients.
A foldable iPhone likely would retail for about $2,000, Daryanani said. The highest priced iPhone now costs $1,400.
Daryanani rates Apple stock as outperform with a price target of 175.
IPhone 13 Could Expand Use Of Lidar
Meanwhile, the design for the iPhone 13 might not be finalized until July or even August, Loop Capital Markets analyst Ananda Baruah said in a recent note.
“For the investment community, prepare to deal with a rumor mill on steroids,” Baruah said. “When looking back on prior S cycles, one thing that was evident was the amount of misinformation (nay, lying) and guesswork was sizable.”
Baruah rates Apple stock as buy with a price target of 160.
The biggest change with the iPhone 13 could be the addition of lidar cameras to all models, not just the high-end versions, Bradley Gastwirth, chief technology strategist with Wedbush Securities, said in a note Friday.
Lidar, short for “light detection and ranging,” permits depth sensing for photo and video applications, including faster autofocus in low-light situations. Plus, it will open up new possibilities for augmented-reality experiences.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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