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.
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.