📈 69% of S&P 500 stocks beating the index - a historic record! Pick the best ones with AI.See top stocks

iPhone 16: Jefferies says checks show 'limited growth'

Published 09-09-2024, 05:58 pm
© Reuters.
AAPL
-

Jefferies analysts tempered expectations for the upcoming iPhone 16, citing supply chain checks that suggest only "moderate" to "not much" year-over-year growth.

In a note to clients on Monday, the firm points out that previous forecasts of double-digit growth for the iPhone 16 may be overly optimistic, leading to potential short-term pressure on the stock prices of companies in Apple's (NASDAQ:AAPL) supply chain.

"While all eyes are on iPhone 16, channel checks show limited growth so high forecasts need to fall," Jefferies writes.

The analysts highlight that although demand for high-end smartphones has been strong, growth headwinds are increasing as the market begins to stabilize after a period of recovery.

Jefferies attributes the anticipated slowdown in growth to several factors, including rising costs for components related to artificial intelligence (AI) and slowing upgrades in traditional smartphone features like display and camera technology.

"The emergence of AI potential for smartphones has likely accelerated the end of this honeymoon period for the supply chain, as BOM costs related to AI such as SoC, fast memory solutions and advanced packaging would have to rise, pressuring margin and the past spec upgrade roadmap," they state.

"Real AI capabilities are likely two years away," the report states, suggesting that hardware innovations in the iPhone 16 will be limited.

Despite healthy demand for high-end devices and potential market share gains in emerging markets, Jefferies expects iPhone 16 sales to be "positive but slow" and believes that inflated expectations for significant growth could lead to a reevaluation of projections.

"We believe iPhone 16 would sell well given healthy high-end demand and share gain potential in EMs. But hardware innovations on 16 are still limited, and its AI capabilities are only at its initial stage and available mainly in the US. Therefore, market talks of double-digit growth are likely
too aggressive," concludes Jefferies.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.