UBS analyst Steven Milunovich has expressed his doubts in Apple replicating the same success next year it experienced in 2012.
In an investors note, he decreased his iPhone sales estimates for the March, June and September 2013 quarters by 5 million units in each quarter. Sales estimates for Apple's tablet, the iPad, were slashed by 2 million per quarter for the same quarters.
Milunovich now expects the company to sell 41 million iPhones during the March quarter, 36 million in the June quarter and 33 million in the September quarter. iPad sales are predicted to reach 21.7 million in the March quarter, 24.5 million in the June quarter and 20.7 million in the September quarter.
The analyst also decreased his earnings estimates for Apple for fiscal 2013 and 2014, as well as lowering the stock target price from $780 to $700. He referred to several reasons regarding his revised outlook: supply chain checks is said to point towards the manufacturing rate for the iPhone dropping to 25 million units for the March quarter.
While the iPhone 5 has just released in China, UBS's sources within the region have stressed that they believe it won't sell as well as the iPhone 4S performed in the Android-dominated market.
Another reason cited by the analyst is the lower-priced iPad Mini appears to be continuously cannibalizing sales of the larger and more expensive iPad. He continued on to state that his previous estimates were too aggressive when taking the lackluster economy in Europe and increased competition from other smartphones into account.
He did, however, offer some optimism for the once-dominant company. "We expect that China Mobile may start to sell iPhones in the Dec quarter, so a summer 5S with TD-SCDMA and fingerprint recognition is possible. Apple is driven to make beautiful products. Whether it is an iTV, wearable computers, or another new product category, we have faith that innovation is not dead."
Apple, which generated $156.5 billion in revenue during the fiscal 2012 year ($41.66 billion profit), recently experienced its largest share price decrease in four years, despite expectations tipping the company to become the first firm in history to be valued at $1 trillion after the iPhone 5's release.
So, what has exactly led to Apple's continuous decrease in market share in both the tablet market and smartphone industry, then? Android, for one, has proved its commercial breadth with devices such as Samsung's Galaxy S3 -- a device that alone dethroned the iPhone 4S' coveted title of the world's best-selling smartphone -- with Google's mobile operating system accounting for over 70 percent of the worldwide smartphone market, while iOS settled for a 13.9 percent share. It's also a similar outlook for the tablet market.
Analysts have continuously criticized the company's inability to innovate, with creativity at the firm "sputtering". These comments were also echoed by Apple's very own co-founder, Steve Wozniak.
By the same time next year, I consider it almost certain that stock prices have plummeted so much that Apple will no longer be the most valuable (single) IT company. (Note that there are several IT conglomerates far more valuable than Apple in absolute value).
Starting to see more Android smartphones as well, especially Galaxy phones.