Soft iPhone Demand; Apple Black Clouds In FY19

Analysts react to the soft iPhone demand and question the latest tariffs on China which may be a drag on earnings and growth in FY19 and how Amazon is leading the cloud business.

2019 Apple iPhones XR Sales

Image Source: Apple.com (screenshot)

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 hedge fund letters, conference, scoops etc

Canaccord - Surveys indicated soft iPhone demand

Based on our North America survey work, we believe Apple maintained strong share of US smartphone sales at all 4 major carriers. However, our surveys indicated soft iPhone demand with disappointing initial XR sales. Despite slowing iPhone sales, we still anticipate Apple will continue to grow its install base and believe the ecosystem will contribute to strong ongoing growth, particularly for higher-margin Services and Other Products. Given the soft start to the latest lineup of iPhones, we are lowering our iPhone estimates and forecast lower year-over-year unit sales in C’19 and anticipate modest unit growth in C’20 based on an increasing installed base. We maintain our belief Apple can expand its leading market share of the premiumtier smartphone market and the iPhone installed base will exceed 700M in 2018.

Wedbush - iPhone Black Clouds in FY19; Pivotal Hand Holding Period Ahead for Cook & Co.

With shares of Apple down roughly 20% since the company reported earnings in early November, sentiment among tech investors is as negative as we have seen in many years covering the name. It’s been a perfect storm for Apple (and its investors) as the combination of softer December guidance, pulling the iPhone metrics and lack of transparency from Cook & Co., a slew of negative data points out of the supply chain and from suppliers such as Lumentum/Qorvo, and now the latest China tariff news is just another potential headwind added to the mix. T

Baird - Getting hard not to shift to cloud

Amazon's rapid pace of innovation is on full display at re:Invent, in particular Ml/AI services that should help solidify the company's cloud leadership position. It is now clear that many enterprises are embracing the commercial value of ML applications, which we expect will accelerate cloud adoption. As usual, AWS announced multiple new customer wins and new platform services, even as Microsoft gains momentum (Azure) and Google aims to become more competitive in the market. Maintain Outperform rating.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver