Piper Jaffray's Gene Munster, one of the better-known analysts who cover Apple, has joined the ranks of his colleagues and competitors who are predicting a decline in iPhone sales when CEO Tim Cook reports his December quarterly earnings on January 26.
Of the seven most recent analyst reports that Business Insider has viewed, all of them predict a slump in the number of iPhone units sold. One group, Pacific Crest, all but accused Apple of shading the truth about its sales prospects in a previous earnings call, in a note that said, "Management's confidence now looks highly likely to be misplaced, which suggests that it was either ignorant of the challenges it faced or deliberately overstating underlying trends."
Apple has never before reported a decline in iPhone sales. Though the company's stock has already declined 26% over the past few months, analysts have not yet added an actual reported decline to their models. And the tech industry generally has never lived in a world in which Apple has struggled to sell more phones. So 2016 seems poised to be a bumpy ride for CEO Tim Cook. (Of course, iPhone 7 — due in September — is likely to fix those problems.)
These are the crucial year-ago numbers of reported iPhone units sold that Apple needs to beat:
- Full-year FY 2015: 231,218,000
- December quarter FY 2015: 74,468,000 (this will be the year-ago quarter Apple will report at the end of this month)
- March quarter FY 2016: 61,170,000 (this will be the year-ago quarter Apple will report against next, probably in April 2016).
Anything below those numbers — 231 million, 74.5 million, and 61 million — looks bad. This is what Piper Jaffray's Munster says in the most recent revision of his models:
We are lowering our Mar-16 iPhone estimates to 55M from 62.5M and June from 48.5M to 45M due to the collection of negative data points from Apple suppliers regarding March quarter estimates and our own supply chain checks. This implies a 10% y/y decline in Mar-16 iPhone sales and 5% decline in Jun-16 vs our current 2% estimate for Dec-15.
Here is an updated summary of what analysts are saying about those numbers. All of them are predicting a decline in sales. Their estimates differ only in the scale of the decline (flat to -20%) and the timing of the decline. They're split on whether units declined in the December quarter and whether that will presage a full-year decline in sales. Some are still predicting sales increases in the December quarter:
- Piper Jaffray, Gene Munster:
December 75 million to 76 million (up 2%)
March 55 million (down 10%)
full-year 2016 (not given) - Pacific Crest, Andy Hargreaves and Evan Wingren:
December 72.7 million (down 2%)
March 49.5 million (down 20%)
full-year FY 2016 213 million (down 8%) - Kulbinder Garcha and his team at Credit Suisse:
December 76.9 million (up slightly)
March 51.9 million (down 15%) - Stifel, Aaron Rakers and team:
December 74.7 million (flat)
March 56 million (down 8%) - UBS, Steven Milunovich and Peter Christiansen:
December 75 million (flat)
March 50 million (down 18%)
full-year FY 2016 220 million (down 5%) - Morgan Stanley, Katy Huberty:
December 74 million (down 0.6%)
March 52 million (down 15%)
full-year FY 2016 218 million (down 6%) - Raymond James, Tavis McCourt and Mike Koban:
full-year FY 2016 224 million to 229 million (down 7.2% on the low end)
