Wall Street Weighs in on Lower Than Expected iPhone Sales

Wall Street Weighs in on Lower Than Expected iPhone Sales

Even though Apple sold a record number of iPhone in fiscal Q1 2014, selling over 50 million handsets in the three months for the first time in history, those sales were below what analysts had predicted. So of course, Wall Street is now concerned about the iPhone’s future growth potential.

1980 Apple Stock Certificate


Apple reported earnings for its first quarter of fiscal 2014 on Monday, revealing it earnedĀ $13.1 billionĀ in profit, driven by sales of 51 million iPhones and 26 million iPads. While iPad sales were slightly higher than expected, the performance of the iPhone came in lower than the 56.5 million iPhones Wall Street expected Apple would sell.

Analysts issued notes to investors following the release of Apple’s earnings reports, and many of them expressed concern about the iPhone’s future sales numbers. A sampling follows…

Wells Fargo

Analyst Maynard Um said the fact that wireless providers are becoming more strict to 24-month upgrade cycles could be as a sign that the “balance of power” between carriers and smartphone manufacturers is shifting back to the carriers.

Cantor Fitzgerald

“AAPL is down but not out,” analyst Brian White said on Tuesday. He does say Apple must introduce a new product category and also make a larger stock buyback to appease investors.

Activist investor Carl Icahn has been pushing Apple to spend more of its cash on itself, buying back shares and returning the money to investors. White believes that Icahn’s voice will “become even louder in the coming weeks.”

Piper Jaffray

Analyst Gene Munster believes the company’s 2014 product cycle is something to get excited about, but doesn’t see any major new releases until fall. He sees reasons for investors to buy Apple in the near-term.

Munster advised investors to buy more shares of AAPL on any pullback that may come today as a result of yesterdays results. As of the writing of this article, shares of Apple have dropped by over $44.00.

Cowen and Company

Analyst Timothy Arcuri says The Street’s “Obsession” with unit sales continues, and sees the results as a “unique buying opportunity” for investors.

Needham & Company

Analyst Charlie Wolf was taken by surprise at the higher than expected international sales performance for the iPhone, saying, “Rather, the shortfall stemmed from lower than expected sales in the U.S.”

Needham sees the larger question for Apple as whether the company can continue to grow iPhone sales while maintaining its position as an “aspirational brand.”

More comments from analysts are available at AppleInsider at the link above.