Sunday, January 31, 2016
As Apple Faces Its Biggest Challenge in a While, Investors Eye Next iPhone as Lifeline
Apple is used to being the overachieving popular kid in Silicon Valley, but the iPhone maker is about to face its most difficult quarter since the first iPhone was announced, after the company forecast a decline in sales.
Faced with weakening foreign currencies, smartphone saturation and no publicly announced product launches in the next three months, Apple told investors on Tuesday the company forecasts revenue for the first three months of the year to be somewhere between $50 billion and $53 billion, falling short of Wall Street's expectation of $55.5 billion.
Apple reported sales of 74.8 million iPhones during the quarter -- up less than 1 percent from the same time one year ago.
Daniel Ives, managing director at FBR Capital Markets, told ABC News that softness -- that's a saturation in smartphones on the market with fewer buyers -- will be a challenge for Apple and its competitors.
"We believe once we go through this choppy March and June period that brighter days are ahead," Ives said. He said he believes investors will pin their hopes to the likely release of a new iPhone in September, a pattern Apple has followed over the past few years.
Apple shares were down more than 4 percent in early morning trading to $95.26.
"The company clearly has some headwinds," Ives said. "But we do not believe this is the end of the Apple growth story, just another chapter [CEO Tim] Cook is about to write."
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