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Apple Shares Downgraded Over iPhone Sales

Apple whose share price is down nearly 9% in less than three weeks since the start of trading this year, now has analysts downgrading its overall share performance.

Apple’s inability to stem falling iPhone sales in key markets such as China, along with its inability to make an effective case for its Apple Intelligence AI platform, has seen it struggle over the last few months.

Shares fell 3.2% on Tuesday, closing at its lowest since November. Tuesday saw more than A$175.33 billion wiped off from the company’s market cap. It now has a valuation of A$5.34 trillion.

Apple has been downgraded to hold at Loop Capital and cut to underperform at Jefferies, the equivalent of a sell rating on the stock, reported Bloomberg.

 

Jefferies analyst Edison Lee pointed towards weak iPhone sales as the reason for its downgrade. Independent research has
indicated that iPhone sales decreased 18.2% in China during the December quarter, while global unit sales dropped 5% in the final quarter of last year.

Ming-Chi Kuo, an industry analyst, recently issued a report revealing that iPhone shipments in China fell by 10-12% year-over-year in December 2024. Recently, the company even decided to offer rare discounts on its latest iPhones in China in an attempt to counter local smartphone manufacturers whose market share in mainland China is growing rapidly.

Pointing out to the lack of enthusiasm over Apple Intelligence and citing a third-party survey, Lee added that “US consumers do not yet find smartphone AI useful,” meaning that it is “unlikely to kickstart a super upgrade cycle anytime soon.”

 

Loop Capital expects a “material iPhone demand reduction” beginning in the March quarter “but materially amplifying” in the subsequent two quarters.

Just over 60% of the analysts tracked by Bloomberg recommend buying the stock, well below other big tech stocks, where the percentage of buy ratings tops 80% or even 90%.

Last year, Warren Buffett’s Berkshire Hathaway cut its Apple shareholding by around 60 per cent in only a few months. At the start of November, Berkshire’s Apple stocks were valued at around A$106.02 billion, versus A$263.9 billion at the end of 2023.



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