The slow sales trend that has been afflicting Apple for months now and if we believe the rumors and recent reports, iPhone 5 isn’t that appealing for consumers. UBS analyst Steve Milunovich believes the survey is an accurate depiction of consumers’ behavior and he estimates it’s going to impact Apple revenue for FY 2013 and FY 2014.
UBS analyst Steve Milunovich estimates Apple will make profits of $44.68 a share, down from $47 in FY 2013, and the plunge continues for FY 2014, at $52.80 a share, down from $55.85. However, the analyst still advises investors to buy Apple stocks, “in the belief that risk-reward is favorable given improving growth, a China Mobile deal by calendar Q4, and skepticism about innovation”. Demand for older iPhone models has increased to 50 percent since iPhone 5 was released.
The recent survey from Consumer Intelligence Research Partners concluded that fewer Apple customers are favoring the 64GB iPhone, opting instead for the 30GB 4S and 20GB iPhone 5. At the same time, despite Apple marketing the hottest smartphone in the market, consumers are still looking at the price tag, choosing more and more older models instead of iPhone 5.
More and more, it seems like former Apple CEO John Sculley is right: a cheap iPhone is really a must for Apple, even though current management declines that would be the case. “As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you’ve got to dramatically rethink the supply chain and how you can make these products and do it profitably” former Apple CEO John Sculley told Bloomberg Television.
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