Credit Suisse: Without a major upgrade, the decline in sales of the iPhone will not be reversed

 Credit Suisse: Without a major upgrade, the decline in sales of the iPhone will not be reversed

(Apples two smartphones: PhoneXSMax and iPhoneX)

Netease Technologies News, April 12, according to foreign media reports, Credit Suisse, an investment bank that has included Apple, said it expects the current decline in sales of the iPhone to continue throughout 2019. Apple is said to be in a dilemma because of the longer life cycle of smartphones and the weakening of the markets appeal to high-priced mobile phones, which damages revenue.

Credit Suisse gave Apple a neutral rating on its stock, arguing that Apples iPhone business has matured. With sales falling by 3.2% in 2018, Credit Suisse analysts expect Apples sales to fall further by 12.4% in 2019.

Credit Suisse said in a research report to investors that the iPhone business was in trouble and that its sales fell by more than 20% from the peak. The use of the iPhone in the hands of users is longer than ever before. According to the investment bank, the life cycle of the iPhone is now about four years, while most smartphones are expected to be replaced in two years.

Analysts at other institutions, including Bernstein, a Wall Street investment bank, agree that the iPhone will last about four years in the hands of users. According to Bernsteins study sent to investors in February, it is estimated that only 16% of the iPhones users are using will be replaced in some form, compared with about a third in 2015.

Apples sales decline in China is considered one of the main reasons for its lower-than-expected revenue. But so far, Apples declining market performance in China has not improved very well, and can not be solved soon. Although the price of the iPhone has fallen by 6% in the Chinese market, Apples revenue in the first quarter of 2019 is said to have not been boosted, down 27% from a year earlier.

Credit Suisse said, We dont expect sales to improve significantly without major upgrades and changes in the functionality of the iPhone. The investment bank expects Apples 5G version of the iPhone to be launched in 2020.

Credit Suisse believes that Apples push into the service sector may eventually help offset the decline in the iPhone business, but this trend will not materialize soon. We feel the potential of Apples transition to the service sector, but we think it will take some time for this transition to work.

Credit Suisse expects revenue from Apples services business to grow from $40 billion in 2018 to $65 billion by 2021. (Tianmen Mountain)

Source: Responsible Editor of Netease Science and Technology Report: Wang Fengzhi_NT2541