Barclays Flags Soft iPhone 15 Demand and Challenges in China for Apple, Including Huawei’s Revival
Apple’s stock faced a significant setback, concluding Tuesday’s trading session with a steep 3.58 percent decline, marking its most substantial drop in four months. This plunge followed Barclays’ decision to downgrade the tech giant’s shares to “underweight” and decrease the price target by $1 (approximately Rs. 83). Concerns raised by Barclays revolved around tepid demand projections for Apple’s speculated iPhone 16 and forthcoming Mac computers. Additionally, China’s tightening regulations on devices manufactured by external companies added to the apprehensions. Apple is expected to unveil several new devices this year, encompassing fresh iterations of iPad models.
According to Reuters, Barclays revised Apple’s stock rating from “neutral” to “underweight,” lowering the price target from $161 (approximately Rs. 13,400) to $160 (approximately Rs. 13,300). This bearish outlook triggered a market reaction, causing a wipeout of over $100 billion (approximately Rs. 8,33,210 crore) from Apple’s market valuation. Consequently, the company’s shares concluded at a seven-month low of $185.64 (approximately Rs. 15,500) on Tuesday.
Barclays analyst Tim Long cited subdued demand for Apple’s recent iPhone iterations and the intricate challenges the company faces, especially in crucial markets like China. Factors contributing to the hurdles include increased government scrutiny and the resurgence of Huawei. Long expressed his sentiment in a client note obtained by Reuters, stating, “The iPhone 15 has been lacklustre, and we believe iPhone 16 should be the same.”
Last year, Apple unveiled the iPhone 15 series of smartphones with hardware improvements over the preceding models, including a USB Type-C port mandated by EU regulations, and a 3nm A17 Pro chip along with an Action button that replaced the mute switch on the more expensive models that are housed in a new titanium body.
Bloomberg’s Mark Gurman recently predicted that the firm’s iPhone 16 models will be equipped with a dedicated “capture” button that can be used to quickly launch the camera app and record videos. The successors to the iPhone 15 Pro and iPhone 15 Pro Max will also sport larger displays, according to Gurman — the latest models are equipped with 6.1-inch and 6.7-inch Super Retina XDR OLED displays, respectively.
Apple is also working on adding several artificial intelligence (AI) features to its iOS 18 operating system, according to Gurman, who says the company hopes the software features will help sell the purported iPhone 16 series that lacks major hardware upgrades. As the company’s next phones aren’t expected to introduce extensive hardware upgrades, the iOS 18 update would need to be “extra impressive” to convince buyers to upgrade to this year’s models, according to the journalist.