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Apple iPhone target is $6b less than expectations as China sales lag


A person uses a smartphone at an Apple store, Beijing, China, January 1, 2024. /CFP
A person uses a smartphone at an Apple store, Beijing, China, January 1, 2024. /CFP

A person uses a smartphone at an Apple store, Beijing, China, January 1, 2024. /CFP

Apple on Thursday forecast a drop in iPhone sales and targeted overall revenue $6 billion below Wall Street expectations as its China business took a hit.

This overshadowed overall fiscal first-quarter sales and profit that beat analysts' targets, powered by iPhone growth, sending Apple shares down 3 percent in after-hours trade.

The results confirmed some analysts' concerns that the company's signature product is losing ground in the key Asian market.

"In China, Apple is facing more competitive challenges not only because of Huawei but also because of foldables, which is a very popular and fast-growing segment in China – and as we all know, Apple does not have a foldable device – yet," said International Data Corporation analyst Nabila Popal.

Apple said sales in China in the December quarter were $20.82 billion, missing analyst estimates of $23.53 billion, according to data from London Stock Exchange Group.

Revenue in the current quarter will be at least $5 billion less than a year ago, when the company sold iPhones rapidly to replenish inventories drawn down by COVID-related factory shutdowns, Apple Chief Financial Officer Luca Maestri told analysts on a conference call.

Maestri's comments implied a revenue forecast of about $90 billion and iPhone sales of around $46 billion for the fiscal second quarter that ends in March. Wall Street expected nearly $96 billion in revenue and iPhone sales of $50 billion. They were $51 billion in the 2023 quarter.

That would make it the company's worst fiscal second quarter of iPhone sales since widespread COVID lockdowns in March 2020.

For its fiscal first quarter ended December 30, Apple reported sales of $119.58 billion and a profit of $2.18 per share, both above analyst expectations of $117.91 billion and $2.10 per share.

Sales of iPhones hit $69.70 billion in the quarter, growing 6 percent to beat analyst expectations of $67.82 billion. Apple's total installed base of devices hit 2.2 billion, up from 2 billion a year ago.

"We had particularly strong double-digit growth on iPhone in emerging markets outside of China," Cook said.

Source(s): Reuters
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