Apple (AAPL) shares took a hit on Tuesday, falling about 1.9% after TF International Securities analyst Ming-Chi Kuo released a report showing iPhone shipments in 2024 compared to last year will decline by up to 15%. Apple will announce first quarter results after the bell on Thursday.
According to Kuo, who has accurately predicted Apple's moves in the past, a decline in iPhone sales in China coupled with the emergence of generative AI-powered and foldable smartphones will put pressure on iPhone sales throughout the year.
“Apple’s weekly shipments in China are down 30-40% [year over year] in recent weeks, and this downward trend is expected to continue,” Kuo wrote in a post on Medium.
Customers experience the newly launched iPhone 15 at the Apple Flagship Store in Shanghai, China, September 24, 2023. (Costfoto/NurPhoto via Getty Images) (NurPhoto via Getty Images)
“The main reason for the decline is the return of Huawei and the fact that foldable phones have gradually become the first choice for high-end users in the Chinese market.”
Barclays, Piper Sandler and Redburn Atlantic downgraded Apple shares in early January due to concerns about iPhone sales in China. However, Bank of America upgraded Apple stock, citing the Vision Pro headset and generative AI as future growth catalysts.
The downward trend has also cost Apple its place as the richest publicly traded company by market capitalization. The company's value is now $2.9 trillion, lower than the new top dog Microsoft, which had a market capitalization of $3.05 trillion as of Tuesday afternoon.
Apple is in the midst of some of its biggest changes yet as the company prepares to significantly revise its App Store policies in Europe to comply with the European Union's Digital Markets Act. The iPhone maker says it will begin opening up European consumers' devices to third-party app stores and enable game streaming services such as Microsoft's Xbox Cloud Gaming on devices.
But critics like Epic CEO Tim Sweeney and Spotify CEO Daniel Ek say the changes don't go far enough to address their respective antitrust concerns.
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The Justice Department is also reportedly considering whether to file an antitrust lawsuit against Apple related to its App Store practices, according to Bloomberg.
All of this comes as Apple prepares to launch the Vision Pro. The Vision Pro, an AR/VR headset that Apple calls a spatial computer, is the company's first new product category since the launch of the Apple Watch nearly a decade ago.
The Vision Pro goes on sale on February 2nd.
Daniel Howley is a tech editor at Yahoo Finance. He has been reporting on the technology industry since 2011. You can follow him on Twitter @DanielHowley.
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