Apple set for slowest ever iPhone sales growth | Reuters - Firstpost
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Apple set for slowest ever iPhone sales growth | Reuters

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Apple Inc is expected to report a 1.3 percent increase in iPhone sales in the holiday quarter, its slowest ever and a far cry from the double-digit growth investors have come to expect.

Apple sold 75.5 million iPhones in the October-December quarter, according to research firm FactSet StreetAccount, 1 million more than what was sold in the year-ago quarter.

Shares of Apple, which will announce earnings after markets close on Tuesday, were trading up 0.3 percent at $99.76, after dipping to $98.07 in morning trading.

Analysts say the bad news is already priced into the stock.

Irrespective of the anticipated lackluster iPhone sales, Wall Street expects Apple to report its biggest-ever profit and revenue in the first quarter.

Analysts on average expect Apple to report a profit of $18.14 billion in the first quarter and revenue of $76.59 billion, according to Thomson Reuters I/B/E/S.

Demand has weakened for the iPhone 6S and 6S Plus, which boasted record weekend sales when they launched in September.

These devices have fewer distinguishing features than their popular predecessors, especially the bigger-screen 6 and 6 Plus phones that were launched in 2014 and grabbed the attention of Asian customers who until then favored the bigger screen phones offered by the likes of Samsung Electronics.

"Apple has become a victim of their own success," FBR Capital Markets analyst Daniel Ives said. "... many customers are either buying an older, cheaper iPhone 6 or waiting for the iPhone 7."

China, the company's fastest-growing market, may also have weighed on results, as a slowdown in the economy forced consumers to tighten their purse strings.

To make matters worse, for the March quarter, Apple is expected to forecast a drop in iPhone sales - its first ever.

This was foreshadowed by disappointing forecasts from the company's Asian suppliers including Taiwan Semiconductor Manufacturing Co.

Apple is expected to sell 54.6 million iPhones in the March 2016 quarter, according to FactSet, down from 61.2 million iPhones a year earlier.

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.

Apple shares have fallen nearly 10 percent since the start of October, steeper than a 2.2 percent decline in the S&P 500 index. The stock trades at 10 times forward 12-months earnings versus Alphabet Inc's 21.5.

(Reporting by Anya George Tharakan and Supantha Mukherjee in Bengaluru; Editing by Sayantani Ghosh and Savio D'Souza)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Jan 27, 2016 00:30 IST

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