Apple shares experienced a 4% decline on Tuesday following Barclays’ decision to downgrade the stock to underweight. Additionally, Barclays slightly adjusted its price target for Apple from $161 to $160.
In a note to clients on Tuesday, Barclays analyst Tim Long expressed concerns about the current “lackluster” sales of the iPhone 15, particularly in China. Long anticipates that this trend may continue with weak sales for the iPhone 16 and across Apple’s hardware products.
The Apple shares witnessed a 4% decline
The analyst highlighted ongoing weaknesses in iPhone volumes and mix, as well as a lack of recovery in Macs, iPads, and wearables. Reports of diminished iPhone sales in China had been observed as early as October, with speculation about the Chinese government discouraging state employees from using iPhones, although the government denies issuing such guidance.
Tim Long also predicted a slowdown in the growth of Apple’s lucrative services business, citing regulatory scrutiny as a contributing factor. While Apple CEO Tim Cook previously noted “better-than-expected” growth in the services unit during an investor call, Barclays remains cautious about its long-term reliability.
Looking ahead to 2024, Long mentioned the potential impact of the Google Traffic Acquisition Costs (TAC) determination and escalating investigations into app store practices. He referred to the payments Google makes to Apple to retain its default search status on Safari, with Google CEO Sundar Pichai confirming a 36% share of Safari search revenue paid to Apple. Regulatory authorities are closely examining both Apple and Google regarding their default search status.


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