Apple iPhone sales set for first annual fall

SAN FRANCISCO — Apple is expected to report the iPhone’s first annual decline in sales volumes this week, but in turn will fuel Wall Street hopes of a rebound in the run-up to Christmas.

Apple is forecast to report iPhone sales of about 45 million units today when it releases earnings for its fiscal fourth quarter, according to analysts, marking the third successive quarter of decline for its flagship product.

That would take total iPhone sales to 211 million for Apple’s 2016 financial year, about 9 per cent lower than the previous year.

Though the drop has been expected by investors based on Apple’s guidance, the result is a stark turnaround after a blockbuster 2015, in which iPhone sales surged 37 per cent to 231 million, thanks to huge demand for the iPhone 6.

While the iPhone 6S was unable to sustain that level of growth, many on Wall Street have become more optimistic about the prospects for Apple’s latest model, which some analysts say may be boosted by Samsung’s withdrawal of its Note7 smartphone following a spate of battery fires.

“We believe investor expectations have already moved higher,” said Deutsche Bank analyst Sherri Scribner. But she expected a limited impact on Apple’s shares, which have risen almost a fifth in the past three months, given that the renewed iPhone momentum was “well telegraphed”.

Although iPhone unit sales are among the most closely watched figures, analysts are expecting a rise in the average selling price of a handset due to the popularity of the iPhone 7 Plus, which is sold out for weeks on Apple’s website.

But some are concerned that supply constraints, particularly for the shiny “Jet Black” model, may limit growth.

While many on Wall Street expect that Apple’s smartphone sales will be little better than flat year-on-year in the December quarter, more bullish investors are already looking at a larger wave of upgrades by customers when next year’s iPhone arrives.

“The real catalyst (to Apple’s stock) is the 2018 supercycle,” said analysts at Morgan Stanley in a recent note, which predicted “accelerating growth” driving its shares back towards the peak of the iPhone 6 era. Financial Times