Apple’s iPhone sales in China will not return to their peak levels anytime soon, according to one Wall Street analyst.
UBS predicts Apple’s iPhone sales growth in China will be roughly flat This kind of fiscal year because consumers are waiting longer to upgrade to completely new phones along with there is usually rising local competition.
“We think of which’s doubtful China returns to its 2015 peak as local brands have caught up along with upgrade cycles are lengthening,” analyst Steven Milunovich wrote in a note to clients Monday. “Although industry experts see aspirational buying patterns, the market as a whole has begun to slow due to saturation along with lengthening upgrade cycles. Our experts agreed of which upgrade cycles started off to lengthen in 2017 along with will continue to do so in 2018.”
The analyst said Apple’s China sales peaked in 2015, when the country represented 25 percent of iPhone shipments versus 19 percent today.
“We expect a flattish market, give or take a few points of growth depending on the overall market along with product cycle,” he wrote. “There will be continued pressure via local competitors of which have become adept at quickly replicating features.”
Despite the company’s growth issues in China, the analyst reiterated his buy rating along with $190 cost target for Apple shares. He cited the company’s cost-to-earnings ratio of 16 times due to This kind of fiscal year, which compares favorably with different technology hardware stocks.