Since the release of the iPhone 8 in September and the iPhone X in November, Apple Inc.(Nasdaq: AAPL) investors have gotten a nonstop stream of mixed headlines and data points concerning the strength of the current iPhone cycle. On Wednesday, Apple investors got more mixed iPhone news from Wall Street when a pair of analysts expressed opposing views on the current iPhone market.
Longbow Research analyst Shawn Harrison downgraded Apple stock from “buy” to “neutral” and says the iPhone 8 and iPhone 8 Plus have been a disappointment. Harrison says the current iPhone cycle is good, but Longbow is not seeing the exceptional demand it had hoped for.
“Apple found iPhone price elasticity with the introduction of the X blunting some demand,” Harrison says. “Reception of the iPhone 8 [and] 8Plus was lukewarm with Apple shifting production back toward the iPhone 7 as a result.”
Wall Street analysts are expecting Apple to ship 239 million iPhones in fiscal 2018. Longbow has now lowered its 2018 iPhone shipment estimate from an above-consensus 248 million to a below-consensus 233 million.
But it wasn’t all bad news for Apple investors on Wednesday. Morgan Stanley analyst Katy Huberty reiterated her bullish view on Apple and said the iPhone X is performing extremely well in the critical China market.
“An increasing mix of upgrades from the much larger base of 3-plus-year-old iPhones points to a strong upgrade cycle in China,” Huberty says.
Morgan Stanley’s data through mid-December suggests Apple’s active smartphone market share in China is now 21.3 percent and rising faster than any major competitors. Huberty says the iPhone X is particularly popular and performed much better than the iPhone 8 through its first 72 days of availability in China. Morgan Stanley estimates the iPhone X gained 0.37 percent share per day of the active Apple user base through Dec. 19, while the iPhone 8 gained just 0.11 percent per day during the comparable period following its launch.
“Given these strong and accelerating data points for the iPhone,and iPhone X in particular, we remain confident in our thesis that Apple is turning the corner in China and growth will accelerate in the quarters to come,” Huberty says.
Until Apple investors get official iPhone sales numbers from the company, they will have…
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