Apple Stumbles Out of the Gate as Analysts Fret iPhone Sales

Barclays analysts fear that the company’s iPhone 15 and its upcoming sequel are not going to spark new revenue growth.

Photo of the exterior of an Apple Store
Photo by Laurenz Heymann via Unsplash

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

It’s been a long time since people actually camped out in front of the Apple store to be the first to buy a new iPhone, but this seems different. 

Barclays downgraded Apple’s stock on Tuesday, warning of slow demand for the iPhone 15, and projecting that the iPhone 16 — slated for a September release — won’t be much of a game-changer either, Bloomberg reported.

Fell Far From the Tree

Apple’s fiscal 2023, which ended in September, was a bit of a fall from grace for Tim Cook & Co. First, the company reported four straight quarters of declining revenue, its longest slide in 22 years. Demand diminished greatly for iPads and Macs, with YoY sales falling 15% and 27%, respectively, according to Bank of America estimates. 

Second, the tech titan had to briefly pull its Apple Watch from store shelves days before Christmas due to an intellectual property dispute — not the best start to the new (fiscal) year. 

Despite all that, Apple’s stock surged nearly 50% in 2023, as the company’s market cap surpassed $3 trillion. However, investors were betting the iPhone 15 would spark significant revenue growth, and now they’re starting to doubt that bet: 

  • In a note Tuesday, Barclays analysts wrote, “Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling.” 
  • The financial institution cut its rating on Apple’s stock to underweight with a $160 price target, implying a 17% decline from its close on Friday. After the downgrade however, Apple shares dropped another 3.6% on Tuesday.

Big Trouble in Big China: The iPhone doubts come as Chinese telecom giant Huawei steps up the competition. Its phones are still subject to a US ban, but in October, Huawei dethroned Apple as the top phone seller in China. Plus, Beijing has begun banning iPhones and other foreign-made devices among government employees. As one of the few US companies to achieve massive success in China, Apple is seeing a reversal that doesn’t bode well for Western tech.