Apple (NASDAQ:AAPL) February hardware builds were lower than the month prior, reversing some of January’s gains, according to Barclays’ AAPL Supplier Tracker.
However, App Store growth increased 15% year over year for the shorter month, bringing the quarter-to-date average to 10%.
“Overall, our checks still indicate continued weaker iPhone builds, with weaker iPhone sell-through and share losses in China and soft macro in the US, and only strength in emerging markets but not big enough to offset,” wrote Barclays’ Tim Long in a note.
Apple headlines regarding the European Union’s Digital Markets Act and the ongoing U.S. Department of Justice versus Google (GOOG)(GOOGL) trial both pose risks to the prolific smartphone maker, Long finds. Also, Huawei looks to take more shares from iPhone, which could to lead to lower unit sales in China for 2024.
Apple’s iPhone sales in China fell 24% year-over-year in the first six weeks of 2024, amid rising competition from Huawei, Counterpoint Research reported.
What’s more, Barclay’s does not see any “significant design changes” to the iPhone16, which is not expected to launch until at least 2025.
“We are in the camp that IP15 is not a good cycle on demand weakness and elongation of replacement cycles. Macro and tough compares are finally catching up,” Barclays noted.
Barclays maintains a Neutral rating on Apple and a price target of $158.
Apple shares were mostly flat during premarket trading Monday.
Apple has a HOLD rating from Seeking Alpha analysts but a BUY rating from Wall Street Analysts. Seeking Alpha’s quant system, which regularly beats the market, rates it a HOLD.
