iPhone 11 Gets a Bad Rap on Wall Street! Apple Could Be in for One of Its Weakest Cycles

For Apple, the current product cycle is likely to be the last cycle before the company began selling the 5G iPhone, which means consumers may choose to wait until next year to upgrade.

Tencent Securities on September 10, an analyst team at market research firm New Street Research made a low expectation for Apple when Apple (NASDAQ: AAPL) is about to release its latest iPhone later today.

Apple will release the new iPhone 11 at 1 pm EST on Tuesday (1 am Beijing time on Wednesday), and consumers and Wall Street's interest in the new iPhone model has never been so low.

For Apple, the current product cycle is likely to be the last cycle before the company began selling the 5G iPhone, which means consumers may choose to wait until next year to upgrade.

Still, the iPhone is not Apple's only way to make money. Earlier this month, Michael Olson, an analyst at Piper Jaffray, pointed out that Apple's services division (including Apple Music Services, Apple Payment Services, and upcoming streaming video services) Apple TV+, etc.) may keep investors looking forward to waiting for the new 5G iPhone.

Or usher in one of the weakest cycles

Analysts at New Street Research released a research report that lowered Apple's stock price target from $170 to $155.

In the report, the analyst pointed out: "Although Apple has taken unprecedented price reduction measures and promotions to support iPhone sales, iPhone demand is still weak. Apple may be entering one of the weakest cycles in the company's history, demand It is becoming exhausted, product innovation is limited, and (the new iPhone, which will be released later today) will be the company's last 4G product portfolio."

The report also said that the price of parts and components is stabilizing, which means that Apple has limited space for price cuts.

“After a decade of historical testing, we have a very good sense of how the product cycle affects demand,” the analyst wrote in the report. "From a common sense point of view, the 2020 iPhone cycle should be the weakest. Unfortunately, Wall Street's average expectations did not reflect this."

Performance expectation

New Street Research gave a "sell" rating on Apple stock.

Analysts at the company expect that Apple's fourth-quarter revenue for FY 2019 will exceed Wall Street analysts' average expectations, but margins will be lower than expected. For the first quarter of the 2020 fiscal year, New Street analysts expect Apple's performance to be disappointing and fail to meet the average expectations of Wall Street analysts.

For product sales, New Street analysts expect Apple's iPhone shipments in FY 2020 to be 11% lower than Wall Street analysts' average expectations. “We expect the stock to hit the valuation low again,” they said.

Apple's share price in the US stock market fell sharply by 1% in early trading on Tuesday to $212.03, compared to a 0.2% decline in the Dow Jones Industrial Average.