Apple CEO Tim Cook attends the China Development Forum (CDF) 2018 annual session held at the Diaoyutai State Guesthouse in Beijing, China, on March 26, 2018.
Jason Lee | Reuters
Apple shares fell more than 3% in Tuesday morning trading after Barclays downgraded the stock to underweight and lowered its price target slightly to $160 from $161.
Barclays analyst Tim Long said in a note to clients on Tuesday that the current “lackluster” sales of the iPhone 15, particularly in China, predicted that sales of the iPhone 16 would be similarly weak. I wrote that there is. Long expects this downturn to apply to Apple's hardware sales overall.
“We continue to see weakness in iPhone unit sales and mix, with no signs of recovery for Macs, iPads, or wearables,” Long wrote. Analysts and investors have been pointing out that iPhone sales in China have been sluggish since October.
Bloomberg previously reported that the Chinese government had issued informal guidance banning state employees from using iPhones. The Chinese government denies providing such guidance.
Mr. Long also expects growth in Apple's lucrative services business to slow due to regulatory scrutiny. Gross margins from Apple's services business are about twice the profits the company earns on all its hardware products, and Apple CEO Tim Cook said on a previous investor conference call that the division's gross margins were “better than expected.” ” emphasized growth.
But Barclays doesn't necessarily think growth is certain over the long term.
“We should get an initial decision on the Google TAC in 2024, and some app store investigations may be strengthened,” Long wrote, noting that Google may not want Apple to maintain its default search status. mentioned the payments made to.
Google CEO Sundar Pichai previously admitted that the company pays Apple 36% of its Safari search revenue. Regulators are scrutinizing both Apple and Google and their default search status.
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