Investment firm Piper Sandler suggests weak iPhone demand in China and economic headwinds will make Apple's December quarter weaker than expected.
iPhone 15 Pro Max
Apple has seen weaker quarters in the past year due to lower-than-expected iPhone sales. Despite that, services and other segments have helped keep the company steady, with Q3 earnings reaching $81.8 billion.
The Q4 earnings report arrives on November 2, but Piper Sandler wants to talk about the December quarter in its latest report seen by AppleInsider. The investment firm sees weak demand in China affecting earnings for Q1 2024 and cites multiple sources suggesting the iPhone 15 lineup isn't a blockbuster.
Piper Sandler discussed device selection and upgrade cycles with multiple carriers and reached similar conclusions with each. Customers are choosing the iPhone 15 Pro Max, overall sales are leaning pro, which could boost ASP, and buyers tend to come from older devices like iPhone 12.
The sentiment around iPhone 15 series appears similar to iPhone 14. While sales lean towards pro models, demand is split between pro and standard as usual.
Customers with iPhone 13 and newer don't seem to see a need to upgrade, with Piper Sandler suggesting customers find their devices "good enough." Those upgrading tend to care about the new camera systems the most.
The report cites other sources suggesting iPhone 15 sales in China have been lackluster. This is attributed to poor economic trends and strong competition from brands like Huawei.
Apple seems to have squashed the overheating issues with iPhone 15 thanks to an update. Piper Sandler notes that customers have stopped asking about the issue since iOS 17.0.3 was released.
Finally, the report suggests that a foldable iPad rumored for late 2024 could be what the iPad line needs for a boost. Plus, if it is released and successful, a Foldable iPhone would follow in 2025.
Piper Sandler has a price target of $220 with an overweight rating. 2024 is expected to be a better year for Apple, especially if it moves into foldables with iPad.